Why the Silver Legacy is struggling

It's really sad to see Reno's upscale Silver Legacy Hotel-Casino teetering on the brink of bankruptcy. Apparently, the respected and deep-pockets Carano family may not be able to save the modern Reno landmark from financial collapse. No one asked, but I'll give you one major reason why the Legacy is struggling: mostly unregulated Indian gaming.

Well-known gaming analysts Ken Adams and Professor Bill Eadington cite the negative effects of California's tribal casinos on Northern Nevada's gaming industry. When the Silver Legacy opened in 1995, Reno's civic leaders were optimistic about the future.

"In 1995, you couldn't have found two people in Nevada who could have accurately seen what would happen," Adams recently told a Reno newspaper. Eadington added that "the volume of tourism is down quite dramatically" during the past 12 years, and Silver Legacy CEO Gary Carano pointed directly to the rapid expansion of Indian gaming in neighboring California as a continuing cause for concern.

These experts, and others, have estimated that Northern California's tribal casinos have helped to shrink Reno-Sparks, Carson City and Lake Tahoe gaming revenues by one-third in the last 10 years. That amount of revenue would have made all the difference to the Silver Legacy and other casinos in our area.

So as the Caranos struggle to satisfy their creditors - Monday is the deadline for restructuring a $142.8 million mortgage note - nearby tribal casinos continue to expand and prosper. The irony of the situation is that one of those competing casinos, the huge Thunder Valley operation on I-80 east of Auburn, is managed by a Nevada gaming licensee, Station Casinos of Las Vegas. So I wonder why the all-powerful Nevada Gaming Commission doesn't force Station to choose between Thunder Valley and its interests in Southern Nevada?

After all, Gaming Commission regulations clearly state that its licensees must operate "in the best interests of the people of the state of Nevada."

So do you think Station's management of Thunder Valley is good for us and our gaming and tourism-based economy? No, it isn't, and that's why I don't understand how the commission and investigative Gaming Control Board can continue to ignore this obvious conflict of interest.

If the board and commission need a reason to look into the management of Thunder Valley, they need look no further than an ongoing investigation by the federal Internal Revenue Service, which recently seized 23 tribal-owned vacation properties from Lake Tahoe to Maui because of "fraudulent billing practices" involving the tribe that operates Thunder Valley. According to the IRS, some tribal officials received more than $7 million worth of illegal kickbacks from contractors.

Station Casinos is in bed with these dubious characters. It's as simple as that. I've long criticized Indian casinos because they allegedly "regulate themselves" and they don't pay their fair share of state, county and city taxes. So our casinos have to compete with one hand tied behind their backs, which isn't fair in a tough economy. Is the Nevada Gaming Control Board listening?

• Guy W. Farmer, of Carson City, was a state gaming control official in the 1960s.