Casinos: Commercial Casinos - Nevada

Gambling has a long history in Nevada. It was widely practiced in the frontier towns of the Old West but was outlawed around the end of the nineteenth century, during a time when conservative values predominated. However, illegal gambling was widely tolerated throughout the state. In 1931 gambling was legalized again in Nevada. At the time, the country was in a deep economic depression.

Casino development was slow at first. Many business-people were not convinced that the rural desert towns of Nevada could attract sufficient tourists to make the operations

FIGURE 4.1

profitable. In 1941 the El Rancho Vegas opened in Las Vegas. Five years later, notorious mobster Bugsy Siegel opened the Flamingo Hotel, also in Las Vegas. Although Siegel was eventually murdered by his business partners for cost overruns, the Mafia became more and more invested in Las Vegas casinos. It was a relationship that lasted for another thirty years and tainted casino gambling in many people's minds.

Although the state of Nevada began collecting gaming taxes during the 1940s, regulation of the casinos was lax until the 1970s. Organized crime figures were gradually pushed out of the casino business as corporations moved in. In 1975 gaming revenues in the state reached $1 billion, according to the official Web site of the Las Vegas Convention and Visitors Authority (www.lasvegas24hours.com). In 2004 the gambling industry is the largest employer in Nevada and accounts for more than one-third of all taxes paid into the state's general fund.

There are many different forms of legal gambling in Nevada, including live bingo, keno, and horse racing; card rooms; casino games; and off-track and phone betting on sports events and horse races. "Restricted" slots are those located in establishments restricted to fewer than fifteen machines, such as bars, restaurants, and stores. "Nonrestricted" slots are primarily located in casinos, which are allowed to have more than fifteen machines.

During 2003 there were 256 commercial casinos operating in Nevada—by far, the most of any state. According to the Nevada Gaming Control Board, the state's commercial casinos (i.e., those not operated by Native American tribes) generated $9.6 billion dollars of revenue from gambling operations during 2003, up 1.9% from 2002. As shown in Figure 4.1 casino revenues leveled off at the beginning of the twenty-first century after climbing steadily during the 1990s.

Nevada casino revenue (or "total win") for calendar year 2003 is broken down by area and gambling category in Table 4.1. Slot machines accounted for 67% of the casinos' gaming revenue in 2003, the highest percentage ever. Revenue from games and tables was down by 0.82%, while that from slot machines was up by 3.25% from the previous year.

Patrons gambled nearly $118 billion at Nevada slot machines in 2003 and nearly $21 billion at games and tables. The quarter slot machine was most popular, accounting for $35 billion (30%) of the total wagered at

TABLE 4.1

Total win; win from games and tables; and win from slot machines, Nevada casinos, 2003 and percent change from 2002
SOURCE: Adapted from "Quarterly Statistics Report," in State of Nevada, Nevada Gaming Commission and State Gaming Control Board: Quarterly Report for the Quarter Ended December 31, 2003; Fiscal Year to Date July 1, 2003 through December 31, 2003; Calendar Year to Date January 1, 2003 through December 31, 2003, State of Nevada Gaming Control Board, February 3, 2004
	Total win
	Calendar dollar	Increase/-Decrease
Counties/areas		dollar	percent
Clark	7,830,675,556	200,713,331	2.63
S. Lake Tahoe area	335,497,875	−903,170	−0.27
Elko	219,587,344	−8,782,307	−3.85
Carson Valley area	102,957,197	5,770,865	5.94
Washoe	1,010,452,464	−24,383,325	−2.36
All others	126,131,745	5,532,834	4.59
Total	9,625,302,181	177,948,228	1.88
	Win from games and tables
	Calendar dollar	Increase/-Decrease
Counties/areas		dollar	percent
Clark	2,724,312,079	−3,590,436	−0.13
S. Lake Tahoe area	118,747,121	−3,245,311	−2.66
Elko	46,451,652	−456,731	−0.97
Carson Valley area	8,945,596	−30,780	−0.34
Washoe	245,246,960	−19,057,963	−7.21
All others	4,741,946	344,010	7.82
Total	3,148,445,354	−26,037,211	−0.82
	Win from slot machines
	Calendar dollar	Increase/-Decrease
Counties/areas		dollar	percent
Clark	5,106,363,477	204,303,766	4.17
S. Lake Tahoe area	216,750,754	2,342,142	1.09
Elko	173,135,692	−8,325,576	−4.59
Carson Valley area	94,011,601	5,801,644	6.58
Washoe	765,205,504	−5,325,362	−0.69
All others	121,389,799	5,188,824	4.47
Total	6,476,856,827	203,985,438	3.25

slot machines. Among tables and games, Twenty-One had the highest amount wagered ($8.6 billion or 41% of the total). However, Three-Card Poker had the greatest increase in play from the year before. The amount wagered at this game increased by 30% to $478 million in 2003. Mini-Baccarat wagers were up by 16% to $1.3 billion.

Although casinos are located throughout the state, the major gambling markets in Nevada are in the southern part of the state in Clark County (home of Las Vegas and Laughlin) and along the California border in Washoe County (home of Reno) and the Lake Tahoe resort area.

Las Vegas

Perhaps no other city is more associated with casinos than Las Vegas. According to the Las Vegas Convention and Visitors Authority (LVCVA) the city had 35.5 million visitors in 2003, and they spent nearly $33 billion. The number of visitors was up 1.3% from the previous year. The city had 130,482 hotel/motel rooms in 2003. The hotel/motel occupancy rate was 85%. This compares with a national occupancy rate of only 59%. The LVCVA reported that the average Las Vegas visitor in 2003 was fifty years old and stayed 3.4 nights in the city. During 2003 Las Vegas was the site of more than 24,000 conventions that attracted more than five million people.

A four-mile stretch of Las Vegas Boulevard south of downtown Las Vegas is known universally as "the Strip." According to the AGA, the casinos on the Las Vegas Strip made up the number one commercial casino market in the country in 2002.

There are more than forty hotel/casinos along the Strip, several of which are among the largest hotels in the country. These megaresorts offer guests such amenities as lavish decorating themes, spas, pools, multiple restaurants, and top-notch entertainment. The large companies operating megaresorts in Las Vegas generate a substantial amount of revenue from nongambling sources, including lodging, dining, and entertainment.

According to the LVCVA casinos in Las Vegas made $6.1 billion in gaming revenue in 2003. Casinos along the Strip accounted for $4.8 of this total. All Las Vegas casinos account for 63% of the state's entire gambling revenue.

Beyond the well-known casinos of the Strip, other casinos are located throughout Clark County. Casinos located off-Strip in Las Vegas are geared toward local markets. They are less flashy and feature more casual dining and entertainment options. In total, the 150 casinos in Clark County, both on the Strip and off, accounted for $7.8 billion in gaming revenue during 2003, according to "Nevada Gaming Revenues Calendar Year 2003 Analysis" (Carson City, NV: State of Nevada Gaming Control Board, Tax and License Division, February 11, 2004). This is 81% of the state's total casino gambling revenues for that year.

Casino gambling has had an enormous effect on Clark County's growth. The population of the county went from 48,289 in 1950 to nearly 1.4 million in 2000. During the 1990s alone, the county's population increased by 86%. This compares with a national average of 13.1%. Clark County residents make up 70% of the state's entire population. Traffic congestion has become such a problem on the Strip in Las Vegas that a four-mile monorail was built to move people around. The monorail began operation in 2004 and makes stops at various resorts and the city's convention center. It is expected to carry nineteen million passengers per year.