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Nevada gaming industry to be hurt by California Indian casinos

RENO, Nev. (AP) – Northern Nevada gambling revenues could dip as much as 21 percent in the next few years as a result of California’s rapidly growing Indian casino industry, the research director for the National Indian Gaming Association says.

”Tribes are becoming something powerful,” said Kate Spilde, who’s also an anthropologist. ”There’s power in being unified, organized, and having a long-term vision. Investors have been watching California Indian tribes for a while.”

”Some investors approach them with $500 million,” she said during a University of Nevada, Reno session Thursday on Indian gambling. ”Five years ago, they couldn’t get a credit card at Kmart.”



Spilde said a Bear Stearns study suggests that by 2004, Reno-Sparks casino revenues could plunge 21.6 percent, or $231.6 million a year.

”The market is there,” Spilde said. ”In the next five years we’ll see more upgrading and the expansion of Indian casinos.”



The Bear Stearns report, released in February 2000, says the impact won’t be as large on the Las Vegas Strip – with resorts losing less than 1 percent of their gambling revenues.

That report was echoed in May by analysts from Merrill Lynch.

”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.

The Merrill Lynch report estimated there were 39 tribal casinos operating before California voted in March 2000 to legalize Indian gambling.

”I don’t think there are going to be too many more new Indian casinos,” Spilde said. ”But there will be more expansions and upgrades, such as cashless machines, the latest equipment.”

Currently, there are 108 federally recognized tribes in California and 44 of them operate casinos. Indian casinos operate in 28 states.

Californians contribute more to Nevada gambling than any other state – roughly 35 percent of the state’s gambling revenues come from its neighbor to the west.

By 2004, California’s Indian gambling revenue could be as high as $10.3 billion, depending on the number of slot machines allowed, Spilde said.

”California will become about half of the entire Indian gambling market in the United States,” Spilde said.

There have been criticisms that Indian gambling is loosely regulated, and that casinos invade urban areas, contribute to problem gambling and cause environmental problems, Spilde said.

”Tribes become a bigger presence and therefore a bigger target,” Spilde said, adding that the debate has caused tribes to become unified and more politically active.

Spilde said in the future, tribes will invest in Indian gambling on other Indian reservations and in other countries.

She also said more economic diversification by Indians is expected, in casino-related hotels and gas stations, recreational vehicle parks, golf courses and retail centers.

Other likely ventures include water bottling plants, power plants; off-reservation banks and other businesses.


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