09/19/2002 11:00PM

No worries despite tough times

Email

Regardless of whether the United States goes to war with Iraq, the economy rebounds in 2003, or any of the country's 50 state governments can balance their budgets, you can expect the gaming industry to keep expanding.

That was the view expressed by analysts at the second annual Global Gaming Expo, which was held in Las Vegas last week. According to the experts, gaming is positioned to prosper, and Las Vegas should benefit too.

"Las Vegas has always been a top gaming and leisure travel destination for Americans and for international customers as well," said Michael Tew of Bear Stearns. "That's why Las Vegas has really survived and been able to thrive throughout all of the recent challenges.

"You're going to see another building boom here now and you're going to see one in another few years with new properties coming on line. I think that's going to increase the competitiveness of Las Vegas. Las Vegas is probably one of the best places to invest your money as a consumer, as a landowner, and as a casino development company."

Local gaming companies Coast Resorts and Station Casinos have new properties planned south of the city. Steve Wynn is building a billion-dollar megaresort, Le Reve, where the Desert Inn once stood. The Holiday Inn chain just bought into the Castaways and plans on building a second hotel tower.

The money shows no fear in the face of tough economic times.

Following the demise of high-profile companies guilty of accounting scams and of high-tech stocks from the "dot-com" era, investors discovered that gaming stocks are a relative safe haven. That trust comes from the transparency that regulators insist upon for casino operations.

"The beauty of gaming is that casinos have to report their revenues to state regulators each month," said Merrill Lynch's David Anders in the Las Vegas Review-Journal. "The states track revenues for them and investors take great comfort in this."

Terry Lanni, chairman and chief operating officer for MGM Mirage, said: "Of the 50 states in this country, 43 are facing reasonable to modest to substantial budget deficits. The last time this happened was the early 1990's and a number of states, especially in the South, went towards this voluntary form of taxation [casino gaming]."

So if more states do turn to gaming and its residents are exposed to the product, what then?

"If you expose somebody, say in Kansas, to gaming and he plays occasionally, will he eventually want to come to Mecca at some point in time?" said Walt Hawkins, director, public gaming for International Game Technology. "Mecca being Las Vegas. I have seen that and I still see that."

"In some ways, the spread of gaming can actually benefit Las Vegas because it exposes people to gaming for the first time," said Rob Powers, vice president of communications for the Las Vegas Convention and Visitors Authority. "It creates even more excitement in our market."

Richard Eng is the turf editor for the Las Vegas Review-Journal and host of the Race Day Las Vegas Wrap Up Show.