Updated on 09/16/2011 7:21AM

Getting serious about monopolies


With the Nevada tourism industry almost in full recovery from the September terrorist attacks, there is a potential storm brewing that could affect the balance of power in the gaming capital.

The State Gaming Commission and Gaming Control Board are considering more stringent rules that would govern monopolies by gaming companies in the state.

This is happening while negotiations between casinos and the 45,000-member Culinary Local 226, which represents half of the Strip workforce, approach a May 31 deadline for agreement on a new contract. The negotiations concern 35 separate contracts with almost all the major gaming giants in Nevada, and the next important date in the talks is May 16, when the union votes whether to authorize a strike.

The Nevada gaming industry in the last decade has gone through the same realignment that much of America's big businesses have. The '90's brought many mergers and acquisitions that have changed the terrain of the gaming industry, resulting in fewer players with bigger bats.

Nevada has had anti-monopoly provisions - designed to protect consumers, vendors, and employees from an unfair concentration of power - in its gaming law for more than three decades. But, as critics have pointed out, gaming regulators never used the rule to block the big casino deals of the last decade.

In the last four years, regulators have approved the 1998 purchase of Caesars World, including its Caesars Palace Las Vegas property, by Park Place Entertainment; MGM Grand's acquisition of Mirage Resorts properties in 2000; and deals by locals giant Station Casinos in 2000 and 2001 that brought the Sante Fe, Reserve, and Fiesta hotel-casinos under Station's corporate umbrella. In South Lake Tahoe, Harrah's Entertainment's bought Harvey's Casino Resort in 2001, giving Harrah's the two biggest casinos in that market. In Mesquite, Randy Black became owner of three of the top four casinos there when he bought Si Redd's Oasis.

Three casino companies - Park Place, MGM Mirage, and Mandalay Resort Group - control more than 75 percent of the rooms on the Strip, and MGM Mirage is said to have about 60 percent of the high-rollers market.

The original 1969 anti-monopoly law was imposed to prevent Howard Hughes from adding the Stardust to his expanding Nevada gaming empire that, at the time, included the Desert Inn, Sands, Castaways, Silver Slipper, and Frontier hotel-casinos.

While the current rule requires regulators to consider the impact of mergers, consolidation, and acquisitions, the law does not define what constitutes a monopoly.

Concerns about unfair labor practices, manipulation of vendors, and fewer options for customers prompted Nevada Gaming Control Board member Scott Scherer to draft an amendment to the state's anti-monopoly rule.

His new proposal, which was introduced for consideration on May 2, sets limits on hotel rooms and gaming venues owned a single company before it is considered a monopoly in the state. The limits include 10 percent of the state's market, 40 percent of a county market, and 60 percent of a local market.

The proposal will now go through several workshops and committees before it is finalized for amendment consideration and possibly becomes law.

Ralph Siraco is turf editor for the Las Vegas Sun and host of the Race Day Las Vegas radio show