Investment report downplays impact of Indian casinos on Vegas
LAS VEGAS (AP) – The spread of Indian gambling in California poses less risk to Las Vegas than to automobile-dependent casinos in Laughlin and Reno, according to a report by a Wall Street investment banking firm.
”We still remain cautious on Laughlin and Reno, given that they are essentially pure gambling markets, compared to Las Vegas, which is a major resort destination,” report authors David Anders and Sal DiPietro said in the Merrill Lynch report.
Anders and DiPietro concluded that tribal casinos in California’s San Diego-Palm Springs region have upgraded equipment and entertainment, but are too far from the Los Angeles area’s 16 million people to cut deeply into Las Vegas business.
About 25 percent of Las Vegas’ 35.9 million visitors last year were from Southern California.
Analysts had expected that if Southern Californians decreased trips to Las Vegas, the stocks of Mandalay Resort Group, Park Place Entertainment and MGM Mirage would suffer. The three companies control more than a third of Las Vegas’ 125,000 hotel rooms.
Auto traffic to Las Vegas from Southern California fell during the first three months of 2001, according to the Las Vegas Convention and Visitors Authority.
But Anders and DiPietro blamed any dip in hotel-casino business on rising energy and gas prices and California job layoffs rather than on the effect of tribal gaming.
The report said the 15 tribal casinos operating in the San Diego and Palm Springs areas offer almost 25,000 slot machines. Most are close to the state-mandated 2,000-machine-per-tribe limit.
Most also offer Las Vegas style slots following the March 2000 legalization of casinos by California voters.
The report estimated there were 39 tribal casinos operating semi-legally in California before the public vote. It said there are now 45.
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