Commission must protect region’s gaming

This is a Nero-fiddled-while-Rome-burned kind of column. In this case, Nero is the all-powerful Nevada Gaming Commission and Rome is the Northern Nevada gaming industry.

As the Las Vegas Review-Journal reported this year, “Indian casinos thumbed their noses at the recession in 2011. Tribal gaming operations across the U.S. recorded their best annual performance in three years, growing revenues nationwide by 3.4 percent.”

According to the annual Indian Gaming Industry Report, the nation’s 460 tribal casinos collected $24.7 billion in gaming revenue in 2011. Tribal casinos in neighboring California raked in nearly $7 billion in gaming revenue that same year, which is about 30 percent of the national total.

So what does this have to do with the legal gambling business in Northern Nevada? Everything, because nearby Indian casinos are delivering a near-fatal blow to Reno/Tahoe-area casinos, aided and abetted by at least one Nevada gambling licensee: Las Vegas-based Station Casinos, which operates the huge Thunder Valley Hotel-Casino just off I-80 east of Auburn, Calif.

Richard Wells of Reno, president of Wells Gaming Research, told a local newspaper that the forthcoming expansion of tribal casinos, including the $800 million, 200-room Graton Resort and Casino scheduled to open in November in Rohnert Park, 40 miles north of San Francisco on the road to Napa-Sonoma, “will further heighten the stakes for Northern Nevada.”

Will it ever! And who will manage that big new tribal casino? You guessed it: Station Casinos.

Meanwhile, Thunder Valley continues to damage our local economy as Station profits from the casino’s favorable location and lack of governmental oversight. Tribal casinos are virtually unregulated by the severely understaffed National Indian Gaming Commission and don’t pay their fair share of state and local taxes.

Irvine, Calif., economist Alan Meister, the author of the annual Indian Gaming Industry Report, told journalists that Northern California tribal casinos “have the advantage of being much closer to the customer base,” most notably Station-operated Thunder Valley.

But are the Nevada Gaming Commission and its investigative Gaming Control Board paying any attention to this obvious and virulent conflict of interest? Apparently not, because I don’t think they’ve ever discussed this issue in public. Gaming Commission Regulation 5.010 requires Nevada gaming licensees to operate “in a manner suitable to protect the ... general welfare of the inhabitants of the state of Nevada.” So is Station’s operation of Thunder Valley Casino in our best interests? No! Clearly, it’s an unsuitable operation.

Wells and other gaming economists note that Northern Nevada gaming revenues have declined by 30 percent since 2002, “partly from the recession but more from nearby tribal casinos” siphoning off gamblers who would otherwise trek over the Sierra to Reno/Tahoe-area casinos. For the moment Thunder Valley is the main offender, but just wait until Station’s Rohnert Park casino goes into operation this fall.

So what is the Gaming Commission waiting for? It should force Station Casinos to choose between its extensive Southern Nevada operations and its Northern California Indian gaming interests. Nevada gambling is a privileged industry and our gaming regulators can impose reasonable requirements on their licensees. I challenge the Commission and Control Board to address this vital economic issue.

Guy W. Farmer worked for Nevada’s gaming-control agencies in the mid-1960s.