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Small Nevada Casinos Oppose Online Gambling

By: Rick Balding, Friday December 17th 2010
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Proponents of online gambling have been working hard to get it legalized and regulated since December 2006, when the UIGEA was enacted. In the beginning the land casinos of Nevada were vehemently against the legalization of online gambling. Over most of last year they have been sitting on the fence on this issue, with their association and the Senator from Nevada being non-committal. However, the largest land casino group Caesars Entertainment has been the only one to lobby strongly for online gambling all through this period. In the last few weeks the Nevada land casinos have spoken out in favor of legalizing only online poker. Meanwhile Atlantic City land casinos have progressed considerably with legalizing online gambling within the state of New Jersey.

From recent reports it appears that there is a schism in the Nevada land casino lobby. Those who favor online gambling or a maintaining a tactical silence are the very large land casino groups. The smaller land casinos in Reno and rural parts of Nevada are beginning to voice their concerns that they will incur greater financial losses if online gambling becomes legal. Their fear is that the larger corporately owned Las Vegas casinos will secure the limited licenses for online gambling operations and cash in. Legalization of online gambling will immediately shift customers away from land based gambling. Those who have the online gambling licenses will more than make up for this loss, but those who do not have licenses will be pushed further in the red.

Two of the representatives of smaller casinos who have spoken out are Ryan Sheltra, general manager of the Bonanza Casino in Reno, and John Farahi, co-chairman and CEO of the Monarch Casino Resort Inc. who own the Atlantis also in Reno. Sheltra said that legalization of online gambling would hurt every brick-and-mortar casino in the state. He added that the casinos in Washoe Country have been through "an absolute bloodbath" with revenues having declined in 37 of the past 39 months. Farahi revealed that gambling revenue has declined by 29% in the Reno-Lake Tahoe area since 2000 from about $1 billion to about $700 million.

If one looks objectively then there is considerable merit in the stand of these smaller casinos. They do not have the resources or the brand value to compete against the larger land casinos. Caesars Entertainment is already operating online casino and online poker from the United Kingdom. Despite not as yet servicing players from the United States it advertises aggressively in the American market. It is the leader in spending on lobbying for online gambling. When online gambling becomes a reality in the United States Caesars Entertainment will reap the maximum benefit.

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