End of an Era at Stateline
It’s hard to believe it’s over. In many ways, the South Shore has been shaped by the five-decade competition between Harrah’s Lake Tahoe and Harveys Resort & Casino. When the casino on one side of Highway 50 offered new, bigger and brighter, the competitor on the other side of the street came back with newest, biggest and brightest.
The rivalry dated back 57 year. That’s when Harvey Gross offered some slot machines and blackjack games at his small lunch counter and gas station, only to be one-upped by Bill Harrah’s bingo parlor across the street a few years later.
Long before Caesars established its Mountain Empire and Del Webb created his High Sierra, now the Horizon Casino Resort, Gross and Harrah developed their own special styles of Nevada casinos, each acutely aware of the other’s every move. That rivalry was instrumental in creating gaming as the biggest economic engine at Lake Tahoe.
Harvey Gross and Bill Harrah’s roadside gambling parlors have long since grown into multi-million dollar corporations. Nonetheless, the recent announcement that Harrah’s was buying out its longtime rival still came as a shock for much of the community.
The $675 million deal will once again reshape the South Shore’s economy. The big question, of course, is how the deal will effect gaming and tourism at Lake Tahoe.
While there is little doubt such a merger will cost some jobs, large scale layoffs probably aren’t in the offing in this tight labor market. Harrah’s policy in other such buyouts has been an arduous process of scrutinizing every department before big changes are made.
After Harrah’s has made the internal transition, the community should gain in many ways from the buyout. Without the cross-the-street rivalry between the two casinos, the next phase of redevelopment should go much more smoothly.
Project C involves redeveloping the other side of the Park Avenue project and building a convention center. That project, which is slated to be built next door to Harveys, has been a source of contention between the two gaming concerns. Harveys understandably has been a proponent for the convention center because it hoped to provide most of the lodging, and gaming, for the conference attendees. Harrah’s was far more reluctant to support Project C because of the close connection to Harveys.
The proposed buyout should solve that problem. Obviously without the financial competition that threatened to derail the redevelopment project, the convention center could be a reality before the next century. In addition, Harrah’s huge investment in the Tahoe market will reinforce the need for additional revenue streams. The convention business, particularly with access to California’s numerous government entities, could be a lucrative market for Lake Tahoe.
The other avenue that should benefit Lake Tahoe is Harrah’s need to market its property here with much more urgency. With Harveys’ properties in Colorado and Iowa, Harrah’s will now have 25 casinos in 12 states. That means more than 20 million names in its data base and extensive potential for cross promotions.
But that doesn’t necessarily mean the South Shore is going to become a one-casino town. Caesars must soon decide whether to renegotiate its lease with Park Cattle for the land under which the casino sits. In addition, Caesars must decide whether to invest in building improvements that have languished on a back burner. The Horizon faces a similar scenario, although not as quickly. Nonetheless, both casinos stand to gain if Harrah’s is successful. While Harrah’s and Harveys have controlled almost 70 percent of the South Shore’s gaming revenues, increasing the total market share should benefit all the casinos. Marketing studies have shown that gaming customers spend only 50 cents of every gaming dollar at the same casino. Luck, good or bad, seems to be something that they like to spread around.
There is no doubt the sale of Harveys marks the end of an era – an era when big dreamers like Harvey Gross and Bill Harrah could turn roadside gaming houses into multimillion-dollar casinos. But the reality is that era ended more than five years ago when Harveys was purchased from Gross’ descendants by Colony Capital LLC.
It was only a matter of time before Harveys was sold again. Fortunately, the buyer was just across the street.
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