A division has emerged among Nevada Resort Association members over revisions to legislation that would allow laid-off gaming and tourism workers to return to their jobs. One company vows to oppose the modified bill and even seek a veto from Gov. Steve Sisolak.
In an email sent Wednesday morning to the casino industry trade groups representatives, South Point Casino-Hotel attorney Barry Lieberman said many of the changes in SB386 – referred to as “Right to Return” legislation – were “particularly onerous for non-union smaller nonrestricted licensees.”
Lieberman, a long time Nevada gaming attorney and a close adviser to South Point owner Michael Gaughan, voiced concern over several sections of the revised legislation that was passed out of the Senate Commerce and Labor Committee Tuesday evening in a split vote. A deal on the bill was reportedly reached between gaming industry representatives and negotiators for Culinary Workers Union Local 226 with less than a week left before the end of the state's 120-day legislative session.
“We voted to oppose SB386 and seek a veto of the bill by the Governor if the bill passed the Senate and the Assembly,” Lieberman wrote.
Lawmakers voted along party lines, 12-9, in the Senate early Wednesday evening, less than 24 hours after the measure passed out of committee. The changes in the bill are apparently backed by some of the casino industry's largest companies, including MGM Resorts International, Wynn Resorts and Caesars Entertainment — Nevada Resort Association lobbyist Bob Ostrovsky told lawmakers on Tuesday that the association “officially on a majority position is neutral, and we will not support the bill and we will not work against the bill as an association, we are neutral.”
In an interview, Lieberman said the legislation treats “non-union resorts in the same manner” as properties with collective bargaining agreements. Representatives from other casino companies declined comment.
Lieberman termed several amendments to SB368 as “a confusing patchwork of vague, burdensome and non-helpful requirements.” He said the changes force employers “to guess at their peril as to what the bill actually requires them to do.”
He suggested the changes to the bill “impairs” an employer’s right to rehire casino workers who have “superior skills” as opposed to other laid-off workers.
Lieberman said the Nevada legislation’s passage will actually “discourage employers from hiring new employees.” Under the legislation, properties cannot hire a new employee for a position until all the provisions for full-time and part time employees “have been satisfied.”
Four sections in the legislation fail “to draw any distinctions between on-call, part time or full-time employees,” the attorney wrote in analyzing the 20-page document. The new language, Lieberman said, is “ambiguous” in describing the timelines for laid off workers and could be viewed as more favorable to part time employees as opposed to full-time employees.
The section requiring businesses to notify laid-off workers of layoffs “makes no sense.”
In the email, Lieberman said a decision was made by a majority of members of the Resort Association’s executive committee to remain neutral “in exchange for negotiating out of SB386 some of the more onerous provisions.” He said the decision was opposed by South Point.
The Culinary Union, which represents some 60,000 non-gaming workers in Nevada’s hotel-casino industry, has said just 50 percent of the workforce has been hired back since gaming reopened following a 78-day shutdown last year. Labor organization officials said SB386 is needed to ensure its members are able to return to their previous jobs.
AFL-CIO Secretary-Treasurer Rusty McAllister, in a statement, called the legislation a “common-sense measure that is urgently needed to create stability in Nevada’s workforce.”
As part of the agreement between the casinos and the union, revisions will be made to SB4, a bill from the 2020 special session last summer that includes government-imposed health and safety standards meant to prevent the spread of COVID-19, as well as expanded liability protections for major casino resorts. The amendment relaxes requirements on cleaning, such as cleaning minibars, headboards and decorative items on beds, and changes directives to clean throughout the day to instead call for cleaning daily.
Bill sponsor and Senate Majority Leader Nicole Cannizzaro (D-Las Vegas) credited the Culinary Union, Nevada Resort Association and the governor’s office for working together to arrive at a consensus on the high-profile legislation.
SB386 would allow workers in the gaming and travel sectors a right to return to their jobs. The bill covers those workers laid off after March 12, 2020 and who were employed for at least six months in the year prior to the governor’s first COVID-19 emergency declaration.
The legislation is similar to at least a half-dozen other bills backed by the labor organization in other states. California Gov. Gavin Newsom, a Democrat, signed legislation last month that requires hospitality and service industry employers to offer new positions to laid off workers.
This story was updated on May 26 at 8:18 p.m. to reflect that the bill passed out of the Senate.
In Texas last week, a massive winter storm froze the state’s electrical grid and left millions without access to reliable electricity, natural gas or even clean drinking water for days.
In California and across the southwest, a scorching heat wave six months ago contributed to an overstressed grid that knocked out the power supply for millions, leaving them without air conditioning as temperatures soared into the triple digits.
Nevada is not Texas, nor is it California. The state avoided rolling blackouts during the August 2020 heatwave (though NV Energy still issued a rare voluntary request for customers to curtail power use during times of peak demand), and hasn’t seen similar severe winter weather that knocked out many grid operations in Texas last week.
But 2020 wasn’t an anomaly. Issues of grid management and resource adequacy — having enough power to meet demand, the same issue that befell California last year and Texas this year — aren’t going away anytime soon. The future for the planet is an increase in extreme weather events, and Nevada is in the bullseye of states most likely to experience massive temperature swings and the full effects of climate change.
Over the past six months, NV Energy officials have been answering questions about the August near-crisis through an investigatory docket opened by regulators at the Nevada Public Utilities Commission, focusing on both what exactly drove the utility to request customers curtail power use on Aug. 18 and 19, but also on broader issues of resource adequacy and how best to avoid a California or Texas-style grid disruption.
The electric utility company has also taken steps to prepare for next summer beyond answering those questions. In late December 2020, it filed an amendment to its Energy Supply Plan that proposes to spend an additional $61.3 million to help prepare for an expected hot summer and additional demand in 2021.
The dollars will help fund projects or infrastructure developments aimed at increasing capacity during hot summer months, budgeting for a hotter-than-normal summer in internal supply planning and raising the required reserve percentage to help with any temperature variances or unexpected increases in demand.
But that additional spending will still leave the utility continuing to rely on open market purchases to meet expected demand — around 900 megawatts per month between June and August 2021. (A megawatt represents enough power for several hundred residential homes, though exact figures vary on source of energy and average residential electrical use).
But that reliance on market purchases to meet expected demand for next summer could be a potential cause for concern: PUC staffers wrote in an investigatory docket that they were concerned a similar seasonal heat wave and subsequent curtailment of open market power in 2021 “may not be a plan for success.”
The investigatory docket also revealed another stress factor on the grid: unexpected load demand from large casinos and businesses that previously filed to leave utility service, but whose alternative electric providers faced the same constraints on electric power and were unable to deliver the promised load, leaving NV Energy to fill in the gaps.
And while NV Energy has invested in expanded large-scale battery storage technology, its move to adopt higher standards of renewable energy over the next decade will also add stress to the grid, because of the simple fact that solar energy is intermittent.
Dylan Sullivan, a senior scientist for the National Resource Defense Council, said that smart grid management planning would avoid any potential or perceived conflict between an increased reliance on renewable energy and the reliability of the state’s power supply.
“Sometimes it's presented as we have to make a choice between renewables and reliability,” Sullivan said. “We really don't have to make a choice if we plan. We can have an affordable, reliable and highly renewable energy system, but we do have to plan for it, we do have to look at what happens when a bunch of things go wrong.”
Open positions and limits on the market
There are three ways that NV Energy creates or obtains electrons that power homes and businesses throughout the state.
The utility company owns a group of about a dozen generating stations (26 actual generating units) — largely natural gas-powered, but with some solar projects in southern Nevada and the coal-fired Valmy power plant near Battle Mountain.
NV Energy also contracts with about 43 generating projects through Power Purchase Agreements, which are long-term contracts with private-party developers to build and generate a certain amount of electricity for the utility company. Many of NV Energy’s recent investments into large-scale solar projects have come through these agreements, also known as PPAs.
But to meet demand requirements, especially during summer months where normal capacity isn’t enough to meet the heightened demand, NV Energy (and other utilities) rely on market purchases of electricity to fill those gaps.
Market purchases fall into three categories: real-time, day-ahead, and term. Term refers to open market purchases that are typically negotiated months in advance, while real-time and day-ahead are what they sound like, closer to real-time needs. NV Energy said in PUC filings that it prefers “firm energy products,” which means there is a commitment placed on the seller of the electricity products to deliver the goods.
Resource planning isn’t like horseshoes or hand grenades; getting close but falling short of meeting actual demand means serious system reliability issues and blackouts. That’s why the utility overshoots its expected demand with a planned reserve margin over expected demand, which last summer was around 13 percent system-wide.
NV Energy plans resource adequacy in a few ways. It’s required by law to file an “Energy Supply Plan,” which is the utility’s strategy and estimates of how much electricity it will need to procure for customers, and how it plans to obtain that electricity. The last Energy Supply Plan was approved in November 2019, but the utility regularly files amendments to the plan.
The utility also uses a seasonal “laddering” approach for market purchases, meaning it discusses and makes further adjustments to planned market purchases every quarter based on more timely weather forecasts and other more up-to-date market conditions.
A near-disaster in August
That normal strategy of relying on open market purchases to fill the gap between supply and demand almost failed during the week of Aug. 17.
The heat wave and grid pressures didn't stop at state boundaries; Nevada saw similar scorching temperatures that week in August, and similar pressures on the grid because of the above-average temperatures and smoke from California wildfires.
NV Energy took many steps to try and lower electric demand: the request for voluntary lower power use, asking large customers to cut electric use, asking large independently owned power generators within the state to help address the demand and issuing a “no touch” order on generation equipment to avoid any inadvertent interruptions.
But the state’s electric market came close to the precipice of disaster. NV Energy reported in the PUC investigatory docket that it reached the third and highest level of an Energy Emergency Alert (utility parlance for power blackouts) for several hours on the afternoon of Aug. 18.
During that afternoon at around 4 p.m., NV Energy fell short of its required operating reserves — the required contingency backup that the utility typically plans for. Twelve minutes into that hour, the company tapped into power provided by the Northwest Power Pool reserves — a grid oversight body covering power networks in eight states and two Canadian provinces.
Tapping into resources from the Northwest Power Pool was like cashing in an insurance policy — helpful to have in place for times of emergency, but evidence that something went wrong. (Again, no NV Energy customers, residential or commercial, experienced outages.)
In its filings, NV Energy said that the issue wasn’t in company-owned generation or any of the (primarily solar) PPAs — all performed between 90 to 100 percent of expected capacity. The company also said there weren’t any transmission issues with moving electrons around the grid.
Instead, the issue was with limitations on market purchases and curtailment — decisions by grid operators (largely in California) to stop the flow of electricity out of the area to ensure that adequate electricity is available in their service area.
During the week of Aug. 17, 2020, NV Energy reported that there were 76 hours (an average of 11 a day) where market purchases were curtailed, meaning the “actual delivered energy was less than the confirmed term, day ahead, or real time purchases.” The largest curtailment happened at 7 p.m. on Aug. 18, when 1,243 megawatts of purchased open market power were curtailed; the company said “NV Energy has never experienced a curtailment of that size.” Many of the curtailments occurred in real time “with little to no notice.”
Between Aug. 17 and 23, NV Energy saw more than 7,100 megawatts of purchased electricity curtailed. 72 percent of that curtailed energy were day-ahead or real-time purchases.
Those curtailments couldn’t have come at at a worse time. The above-average temperatures drove NV Energy and other power providers to rely on market purchases to keep lights on throughout the state, driving the price of a megawatt hour to obscene levels.
Electricity that the week prior had cost around $70 per megawatt hour skyrocketed amid the incredible demand — hitting a real-time peak of around $2,600 per megawatt hour on Aug. 18. That’s a more than 3,600 percent increase, or like a gallon of milk going from $2.99 one week to more than $100 a few days later.
The docket identified another stress factor that affected the state’s grid during those hot August days — servicing many of the large businesses that had previously filed to leave utility service and work with providers on the open market.
These “704B” customers (named after the provision in state law) are some of the most well-known entities in the state: MGM Resorts, Switch, Wynn Resorts, Caesars Entertainment, Sahara Las Vegas and the Peppermill Resorts in Reno. Before state lawmakers in 2019 added new limits, those companies would generally file an application and agree to pay a seven-to-eight figure “exit fee” in return for the right to buy power (presumably cheaper) on the open market.
But those businesses aren’t totally free of NV Energy. As the balancing authority or grid operator, NV Energy still manages transmission for 704B customers, meaning they’re obligated to provide balancing services and manage the flow of electricity for those customers. The utility also acts as a provider of last resort, meaning that the customers pay a tariff (fee) to ensure that NV Energy will provide power if any of their normal providers had a disruption in service.
That’s exactly what happened in August. Four electric providers for 704B companies failed to fulfill their obligations to their customers on the afternoon of Aug. 18, leaving some of the state’s largest casino companies to once again lean on NV Energy to keep the lights on and power running.
The alternative power providers experienced varying levels of failure; Caesars’ shorted power supply from provider Tenaska never exceeded 10 percent, while the Peppermill in Reno had to 100 percent rely on NV Energy power for several hours on Aug. 18.
In a filing, staff for the PUC wrote that while NV Energy still provides electricity transmission service to 704B customers and is expected to make up imbalances in power supply, the level of failure to provide power well exceeded any imbalance authority and instead worked essentially as a standby service.
“This creates a riskless paradigm under which certain NRS 704B customers shift supply risk and the obligation to NV Energy and its remaining customers with little risk to the NRS 704B customers,” PUC staff attorney David Noble wrote in a filing.
Noble wrote that NV Energy was supposed to write-off the load of 704B customers once they left utility service, but “clearly that is not the case” given what happened in August. He suggested that the PUC and NV Energy in future proceedings explore ways to charge 704B customers for what essentially worked as standby service.
“If NV Energy and remaining customers are going to have to backstop some or all of these departed customer loads when the market gets tight, then NV Energy and remaining customers need to be compensated for that service, and NV Energy needs to start planning for the possibility of such events in its ... filings,” Noble wrote in the filing.
Tenaska and other alternative providers pushed back, saying that the 704B customers already pay a fee for the transmission provider (NV Energy) to backfill load in the event of “system contingency.” They wrote that the system worked as intended, and that 704B customers paid NV Energy for any electricity the utility had to provide.
During times of peak demand on Aug. 18, NV Energy was required to make up a shortfall that varied between 131 and 85 megawatts of power for transmission-only customers (the 704B companies). That amount of power diverted to those customers was smaller than the curtailment amount NV Energy was dealing with at the same time, but the utility wrote that the two issues combined had exacerbated supply issues to the near-crisis level.
“If firm purchases had been delivered and transmission customers avoided leaning on NV Energy’s resources, the shortfall would have largely been avoided,” NV Energy executive Michael Greene wrote in a filing.
Planning for next summer
Even if NV Energy was to sit on its hands and not do anything to prepare for the 2021 summer, past contracts for large-scale solar and battery resources are scheduled to be operational before summer strikes.
But even with that expanded capacity, NV Energy is still planning to rely on market purchases during summer months of 2021 to meet anticipated demand goals.
That is largely due to a change in energy supply planning for the remainder of 2021. The amended Energy Supply Plan filed in late December makes several changes, including:
Implementing a “hot summer” weather scenario, which estimates hotter temperatures in the summer and raises anticipated demand levels
Raising the utility’s planning reserve margin up to 15 percent system-wide
Upgrading two of four existing natural gas-fired turbines at the Lenzie Generating Station that will add an additional 37 megawatts of capacity, at a cost of $46.3 million
Installing a “wet compression” water injection system on two existing combustion turbines at the Higgins Generating Station for an additional 32 megawatts of capacity, at a cost of $6.5 million
Fulfillment of a contract with the British Columbia Hydro and Power Authority for a hydropower PPA, adding 209 megawatts of capacity over the summer
While the utility wrote in PUC filings that it doesn’t believe any policy changes are necessary to meet demand this summer, it said the above proposed changes to its energy supply plan are necessary as the current plan is “inadequate to address the potential for extreme weather power demand due to climate change and provide adequate planning reserves.”
In future planning proceedings before the PUC, the utility also suggested revisiting its formula for weather predictions and correlated demand planning. NV Energy uses a rolling 20-year average in guessing weather and demand, but said the formula doesn’t fully capture the warming trend in recent years.
PUC staff also suggested that the utility hold more frequent meetings to determine if “firmer” market purchases can be made ahead of expected hot weather, as opposed to relying on real-time or day-ahead energy markets.
Sullivan, who often testifies on clean energy issues before the Nevada Legislature and in PUC dockets, said that policymakers can take other steps to shore up grid reliability and reduce the impact of major weather events on the grid.
His group is supporting legislation in the 2021 Legislature to raise energy efficiency standards — a concept that he said reduces the demand strain on the grid by keeping indoor temperatures less variable on the weather.
Overall, Sullivan said that the best way to ensure reliability on the grid while increasing the utility’s share of renewable energy resources was diversity — solar in Southern Nevada, geothermal in Northern Nevada, and tapping into hydropower or wind energy from other states where possible.
“One of the ways to have a highly renewable, resilient, reliable, affordable energy system is to have a diversity of renewable energy resources,” he said.
Citing a troubling uptick in the state’s COVID-19 cases and hospitalizations, Gov. Steve Sisolak has announced a new state mandate requiring individuals to wear a facial covering or mask while in public.
Sisolak made the announcement on Wednesday during a press conference in Carson City, following in the footsteps of neighboring states such as Washington and California that have issued mandates requiring people to wear masks while out in public.
The governor, who in the past has been hesitant to require mask-wearing, said he was concerned with both the rising COVID-19 caseloads in the state as well as photos and videos of crowded Las Vegas casinos with most people not wearing any kind of facial coverings.
“I don't know why, but when (did) protecting our health and our neighbors lives become a political, partisan, or even philosophical decision?” he said. “For me it's none of those. It's a medical necessity, a human obligation. And it’s good for businesses.”
The decision by Sisolak marks the first significant tightening of restrictions since Nevada entered “Phase 2” of limited business reopenings at the end of May, and nearly three weeks since the state’s casino industry was allowed to reopen for the first time since March.
The directive will take effect on Friday, and empowers OSHA, licensing boards, local governments and the attorney general to enforce the directive and if necessary impose fines or criminal penalties. Sisolak emphasized that it wasn’t his goal to heavily police individuals or businesses, but he thought a mandate was necessary in order to ensure a greater percentage of the population started to wear masks.
The directive also exempts some categories of individuals from the requirements, including:
Children under the age of 9
Individuals experiencing homelessness
Anyone who cannot wear a face covering or mask due to a medical condition or disability, or cannot remove a mask without assistance. Individuals are instead encouraged to wear alternatives, such as face shields, but won’t be required to “provide documentation verifying their condition.”
Anyone who is incarcerated
Individuals for whom “wearing a face covering would create a risk to the person related to their work”
Anyone who obtains a service that would require removal of the mask to access their face or nose
Individuals at a restaurant or other establishment to eat or drink, provided they are at least six feet away from other patrons
Anyone engaged in outdoor work or recreational activities, such as swimming, walking, hiking, bicycling or running
As with the rest of the nation, the number of new COVID-19 cases statewide has ticked up significantly in the last two weeks, with the 7-day moving average of test positivity rate exceeding 10 percent for the first time since early May. In three of the last seven days, the statewide case count has jumped by more than 400, with a high of 462 new cases announced Tuesday.
Julia Peek, deputy administrator for the state’s Community Health Services division, said contact tracing efforts were continuing to get off the ground and help track potential future outbreaks. For example, she said that between June 4 and June 16, about 11 percent of people called by a contact tracer reported attending a mass gathering, and 12 percent said they had been to a “civic activist event.”
A study published earlier this month indicated that one of the most effective ways to stop person-to-person spread of the virus is through wearing a mask. Facial coverings and masks can limit the spread of the virus by preventing outward transmission of the virus from an infected or asymptomatic individual, as well as protecting a person surrounded by people who could be carriers.
Sisolak said he didn’t want to get to the point of having law enforcement walk around and ticket people for not wearing a mask, saying it was “troubling and really discouraging” that some people had made the act of wearing a mask into a political or partisan argument.
“We're hoping that they will understand the severity of the situation and voluntarily wear masks,” he said. “I mean, every responsible medical professional will tell you a mask helps reduce the spread of an infectious disease. Anyone who’s denying that is just denying reality.”
Sisolak previously raised the idea of requiring facial coverings, saying last Friday that he was asking his medical advisory team “to evaluate potential options for enhanced face covering policies.” Several local government leaders, including Reno Mayor Hillary Schieve, have indicated support for a mandatory mask policy.
The politically powerful Culinary Workers Union Local 226, which represents many workers at Las Vegas Strip properties, called for a mandatory mask policy earlier this week.
Several hours before the governor’s announcement, Caesars Entertainment made masks mandatory for anyone inside its casino properties, including guests, vendors, contractors and employees. The new rule went into effect at noon, with exceptions carved out for when people are eating or drinking. It builds upon the prior policy that required face masks for all employees and guests playing table games.
People who refuse to wear a mask after being asked to do so will be directed to leave, company officials said.
“We are immediately requiring everyone in our properties to wear masks, because the scientific evidence strongly suggests that wearing masks and practicing social distancing may be the most important deterrents to spreading COVID-19 from person to person,” Caesars Entertainment CEO Tony Rodio said in a statement.
Other top casino operators quickly weighed in after the press conference to express support for the new mandate. MGM Resorts acting CEO Bill Hornbuckle said the company supported the governor’s decision “and will begin to enforce according to his guidelines.”
A spokesperson for Wynn Las Vegas said the company “applaud(s)” the governor’s decision and that “face coverings will not diminish the unique experiences only Las Vegas can offer visitors.”
Sisolak — who said this week that a planned legislative special session to deal with the state’s budget would be pushed back to early July — said the latest figures developed by state and legislative fiscal staff indicated a $1.27 billion shortfall for the 2021 fiscal year, which starts next week. That’s about 25 percent of the approved operating budget.
The governor said that once tax revenue collection figures for the month of April are released in the next few days, he and his staff would update the projected budget shortfalls for both the current and upcoming fiscal years; the clearest picture yet of what cuts the state will have to make in order to balance its budget.
Sisolak emphasized “this is not a normal recession,” and that revenues could rebound quickly if everyone follows social distancing and mask-wearing guidelines. But he defended himself, without naming names, from criticism offered by legislative Republicans regarding his office not sharing budget cut details.
“It would be irresponsible to release every minute-by-minute revision of this budget proposal without proper vetting by our fiscal experts before receiving these numbers with the hopes of reducing the potential dramatic impacts to our state budget,” he said.
Unemployment insurance claimants who have not yet been paid, sometimes because of questions about whether they should be drawing from traditional unemployment benefits or the federally funded Pandemic Unemployment Assistance program for independent workers, have sued the state to try to speed up the benefits.
Asked about workers who are in that limbo, Sisolak said there’s no easy fix beyond waiting for the Department of Employment, Training and Rehabilitation (DETR) to work through the issues.
“Unfortunately there is not another answer,” he said. “DETR is working around the clock to resolve these issues. We’ve gotten to as many of them as quickly as we possibly can. Unfortunately, the ones that are still having trouble are usually an isolated case that they have a specific instance like you’re saying with their wages or whatnot. They have to be handled on a one at a time, case by case basis.”
Asked if there’s a way to speed the process, he noted that claims can sometimes take 30 to 60 minutes to resolve, and individual claims processors are sometimes limited to reviewing about 12 a day. Robocallers who clog the phone lines are also making it more difficult for claimants to receive help, he said.
“We are working through them as fast as we possibly can,” he said.
Sisolak also spoke to the departure last week of DETR Director Heather Korbulic, who said she was leaving because of threats to her personal safety. He declined to go into detail about threats to other state employees or himself but said there was a “whole team that tracks threats.”
“It's unfortunate that Heather was put in this position,” he said. “And sometimes people are just — I don't think they think before they go online and say some of the things that they say, and do some of the things that they do, but Ms. Korbulic really should never have had to go through what she went through and we're doing everything we can to keep her safe and all of our state employees safe.”
A moratorium on evictions is set to go through at least June 30, but Sisolak hasn’t yet announced whether that will be extended or how it would be lifted when the time comes. He said he expected the question would be addressed in the next three to five days.
“We’re still gathering some data and talking to some of the groups that are involved with this and should have an update on this in the next few days,” he said.
He did confirm that the moratorium’s protections would not disappear all at once.
“There’s a lot of anecdotal stories about individuals that unfortunately haven’t gotten their PUA or their [unemployment insurance]. It’s definitely something that we’re considering and we will have a phased in or rolled back approach,” he said.
Schools reopening and child care
School districts in Washoe and Clark counties have proffered plans on how to reopen that suggest staggering student schedules and mixing in-person and virtual learning. The possibility of children staying home for days or weeks when they would usually be at school has concerned parents who wonder whether they can return to work or afford child care to accommodate such an arrangement.
Sisolak said he was confident that state Superintendent Jhone Ebert would be able to work with districts, parents and teachers to develop individual reopening plans.
The governor said it was highly unlikely there would be any “infusion of state money” to help the state build up its child care capacity to handle the expected increase in demand, given the state’s ongoing budget shortfalls.
A little more than a week ago, a who’s-who of Nevada leaders — the governor, attorney general, state superintendent and health officials from across the state — packed a government building lobby in downtown Las Vegas.
They came to display a unified front as Nevada braced for what seemed inevitable: a coronavirus case within the Silver State’s borders. Gov. Steve Sisolak even demonstrated the proper technique for coughing or sneezing into an elbow.
“We’re going to prepare, not panic,” he said.
Five days later, on Wednesday, Nevada’s first patient tested presumptively positive for COVID-19. Then came a second case in Reno the following day, and the third and fourth cases in Southern and Northern Nevada on Sunday.
While the state awaits official testing confirmation from the Centers for Disease Control and Prevention, a different kind of test has begun playing out in Nevada. The emergence of the upper respiratory disease that has sickened about 100,000 people worldwide and killed more than 3,300 stands to challenge the state’s health-care system, tourism sector and education department to varying degrees. Hospitals are readying for a potential influx of patients. Resorts are installing hand-sanitizer dispensers in high-traffic areas. School districts are canceling student trips and forming contingency plans.
Still, no one knows how widespread the coronavirus will emerge in Nevada or how long it will last, making public health and economic predictions difficult, if not, impossible. Other tragedies that either directly or indirectly affected Nevada, such as 9/11, the October 1 mass shooting and natural disasters, had more clear-cut beginning and end points, at least in terms of the event itself.
“The challenge with this one is the event is either A) happening, or, B) still ahead of us,” said Billy Vassiliadis, chief executive officer of R&R Partners, the ad agency that produces marketing campaigns for Las Vegas.
Planning for patient influx
When the United States’ first case of the novel coronavirus was confirmed Jan. 21 in a 35-year-old Washington man who had recently traveled to the center of the outbreak in Wuhan, China, it was only a matter of time before it was Nevada’s turn. True, there was only one airline, Hainan Airlines, that flew direct to China before suspending flights earlier this year. But with more than 50 million people flying through McCarran International Airport last year, the odds were never in Las Vegas’ favor.
So some considered it a small mercy that the first case of the novel coronavirus in the state wasn’t confirmed until Wednesday, in a Clark County man in his 50s who had known travel history to Washington, a locus for the virus’s outbreak in the U.S., and Texas, which also has many confirmed cases.
“Every day that we don’t have a confirmed case just gives us one more day to take a deep breath and plan,” said John Packham, an associate dean at the University of Nevada, Reno, School of Medicine.
But the timing of the first diagnosis was also a byproduct of another mathematical reality. Labs in the state had only run 14 tests for COVID-19, which all came back negative, as of Tuesday evening. With a limited number of tests available, only a select number of patients, generally those with cough, fever and shortness of breath who recently traveled to a known affected region, have been tested for coronavirus in the state.
Where South Korea has gone so far as to offer voluntary drive-through coronavirus testing and identified thousands of patients with the virus, a botched test distributed by the Centers for Disease Control and Prevention has meant the U.S. has tested relatively few people. In the state of Washington, researchers have determined the coronavirus has been likely circulating for weeks based on DNA evidence.
“It’s very likely that there is already community transmission here that we don’t know about,” said Dr. Kevin Murphy, an infectious disease specialist in Reno. “And that’s in part because we haven’t been able to ramp up our testing rapidly enough.”
So far, officials with the Southern Nevada and Washoe County health districts have said there is no evidence of community transmission. At least three of the four patients who have tested presumptively positive for the disease are thought to have acquired it elsewhere — the Clark County man during his travels to one of two states, a man in Northern Nevada who was a recent passenger on the Grand Princess cruise ship linked to several cases of the virus, and a second Washoe County man in Santa Clara, Calif.
The Clark County man, a veteran who was identified through the Southern Nevada VA Health System, is in "serious condition," health officials said this week, while the Northern Nevada men are recovering from the virus in self-isolation at home. No further details were immediately available on Sunday about the fourth case in Clark County.
With the first four presumptively positive patients identified in the state, public health officials and doctors are continuing to prepare for additional cases to surface. On Friday, the Department of Health and Human Services said local health officials were monitoring a total of 40 residents who had recently traveled aboard the Grand Princess, and Washoe County Health District officials tested kids at Huffaker Elementary School in Reno, attended by family members of the Northern Nevada man and where there has been a recent uptick in influenza-like symptoms among students. All the tests for kids at Huffaker came back negative for COVID-19, officials said Friday night.
“It’s a virus, and it’s going to spread all over the world,” said Dr. Dale Carrison, the former head of emergency at UMC and now an emergency room physician at Carson Tahoe Health. “There’s nothing anyone can do about it. It's a virus. It spreads.”
While Nevada is known for having some of the worst health care in the nation, health officials here aren’t too worried about the state’s ability to handle an influx of cases. Carrison, who at one point chaired the Nevada Commission on Homeland Security, noted the networks that exist between hospitals to support each other in the event of a crisis, public health or otherwise.
“You look at our statistics and say our medical care is bad, but you couldn’t have had a more cooperative group of hospitals and people in the community on this earth,” he said.
But if 500 people get sick in Las Vegas at the same time?
“Well, that’s a problem,” Carrison said. “But guess what? That’s a problem in every city of the United States of America.”
The biggest pressure point experts see here is in hospital emergency rooms, which are already overcrowded. They worry that an influx of coronavirus patients needing hospitalization — coupled with only minorly ill patients or those who may worry they have contracted the disease flooding emergency rooms — could put intense stress on the system.
“My biggest concern is hospitals really both north and south that are already operating at capacity,” said Packham, who also chairs the Patient Protection Commission. “They already have disruption with just seasonal influenza, much less trying to think about how they’re going to deal with or isolate patients that have tested positive and so forth in their current operations.”
That’s why health officials are spending so much time educating the public about the symptoms of the disease — typically cough and fever — and urging people to stay home, don’t go to school or work, isolate themselves from others and treat their symptoms with over-the-counter medications. For those who do require medical attention, doctors advise calling ahead so as to not unnecessarily expose health care workers on the frontline of fighting the coronavirus.
“What we are trying to do is make sure that we’re preserving our workforce so we’re not having self-inflicted wounds on the front end,” said Washoe County District Health Officer Kevin Dick. “Then we will be working to have individuals if they are tested positive for COVID and they can isolate at home and don’t need hospitalization, our plan is to do that rather than to drive people toward the hospitals, and we would try to preserve their capacity for dealing with the more severe.”
And while Nevada does suffer from a physician shortage — the state ranks 48th in the nation for active patient care physicians per capita — experts say there isn’t much to be done about that right now.
“We have whatever we have. We’re not going to increase the number of physicians in Nevada in time to make any difference,” Murphy said. “We have to deal with what we’ve got.”
It’s not just doctors either. SEIU Local 1107, which represents 9,000 nurses and hospital workers throughout the state, is scheduling meetings with hospital administrators to discuss their preparedness plans for coronavirus.
“We’re going to bring our members, representatives, to make sure that the plan is something that is okay because the members, the nurses and the ancillary staff, they will know more what are the things that needs to be done in terms of how to be safe,” said Grace Vergara-Mactal, the union’s executive director. “We want to make sure that we are part of that preparedness plan and not just them creating it and just giving us a piece of paper.”
There’s also a concern that patients who need to be tested for COVID-19 won’t want to, for fear of the cost. To that end, the governor adopted an emergency regulation on Thursday barring state-regulated health from billing patients for visits to provider offices, urgent care centers or emergency rooms to be tested for the coronavirus.
“Countries like South Korean, Japan and even China where those cost considerations are not being weighed before you get medical treatment are not getting in the way like they will here,” Packham said. “There will always be an element of that.”
The bad news is that the coronavirus appears to be highly transmissible and the World Health Organization has pegged the global fatality rate at 3.4 percent. The good news is that experts predict that the fatality rate will likely decrease over time because the milder cases, including those with few to no symptoms, are probably going undiagnosed — particularly in the U.S., where testing has been limited.
“What proportion of people with this virus never get sick, just get immune — that may be a large percentage,” Murphy said. “We know of those who get sick, 80 percent have mild disease, but that may just be the tip of the iceberg. There may be a much larger portion of infected persons who never get sick.”
In the meantime, experts are reminding people to wash their hands, clean frequently touched surfaces, avoid shaking hands with others and stay home from school and work if symptomatic. Not only are they good measures for preventing the coronavirus, they said, but also the seasonal flu, which has already claimed 35 lives in Clark County this season.
“A lot of sick people come in, retirees, they fly all over the world,” Carrison said. “I just have to do the things that I know work — wash your hands and if you’re sick, don’t go to work.”
“I think I’ve had a flu-like illness once in the last three to five years and all I do is see sick patients,” Carrison added. “I’m certainly not superman.”
The tourism factor
The outbreak of the coronavirus in China served as a cautionary economic tale for Nevada from the get-go. Casinos in Macau closed for an unprecedented 15 days, tanking revenue in the process.
Bloomberg reported gaming revenue down by about 88 percent in February from last year, a slump that could hurt major Las Vegas companies in the first quarter given their Macau presence. Major Strip casino operators — Caesars Entertainment, Las Vegas Sands, MGM Resorts and Wynn Resorts — all discussed the potential impacts of the coronavirus in annual report filings with the Securities and Exchange Commission.
In an annual filing dated Feb. 7, Las Vegas Sands reported that its Singapore and Las Vegas operations could also be “adversely impacted” if travel restrictions stay in place “or the global response to contain the spread of the 2019 novel coronavirus escalates or is unsuccessful.”
Citing similar restrictions in Macau, MGM Resorts also predicted it could “see material declines in MGM China’s operating results during the first quarter of 2020 and potentially thereafter.”
“Additionally, to the extent that the virus impacts the willingness or ability of customers to travel to our properties in the United States (due to travel restrictions, or otherwise), our domestic results of operations could also be negatively impacted,” MGM Resorts said in its Feb. 27 filing.
Some properties have taken steps to address the coronavirus with employees and guests.
A spokesperson for Wynn Resorts, which also noted the coronavirus in a February federal filing, referred The Nevada Independentto a website it created with information about the virus. The website says the gaming company is consulting with a public health expert from Georgetown University Medical Center, mandating a stay-at-home policy for workers and sanitizing door knobs, elevator buttons, handrails and other touchpoints at an increased frequency.
“Just like you, we are closely monitoring new developments regarding the coronavirus, and we are taking every proactive step to make Wynn a haven in these uncertain times,” the site says.
On Friday, MGM Resorts also released a statement saying that although the risk to the broader public remains low, it “implemented temporary enhanced cleaning procedures and protocols.”
Those measures include placing hand sanitizer stations in heavily-trafficked areas, increasing disinfecting procedures and providing information to guests and employees about prevention.
What the industry can’t control, however, is actual visitation. Several high-profile organizations have canceled upcoming meetings, conferences or conventions in Las Vegas. A special summit of the Association of Southeast Asian Nations, planned for mid-March, was canceled. Organizers of the 2020 NXT Global Summit, which focuses on the future of how people live and work, also canceled the mid-July event.
“Although our event is still a few months away, it is clear that our sponsor and exhibitor partners, as well as ticket holders, are making the choice to forego any and all large-scale events for the foreseeable future and it is simply not tenable for us to launch our event in this climate,” the organizers said in a statement posted to their website. ”Therefore, in keeping the health and wellbeing of our attendees as well as our own team in mind, we have decided we will cancel the 2020 NXT Global Summit and continue planning for our expanded 2021 event.”
The Las Vegas Convention and Visitors Authority hasn’t released a full list of cancellations, saying it could only speak for events happening at the Las Vegas Convention Center, not ones occurring at individual casino-resort properties. But announcements by event organizers indicate that cancellations or postponements haven’t become a sweeping standard within the industry.
A major construction trade show known as CONEXPO-CON/AGG is proceeding with its March 10-14 event. The organization’s website encourages attendees and exhibitors to stay home if sick but also notes 18,000 new people have registered since Feb. 21.
ASD Market Week, the nation’s largest consumer merchandise trade show that meets twice a year in Las Vegas, is doing the same. Organizers weighed the current health circumstances with the long-term economic consequences for the many small- to medium-sized businesses that rely on attending the March 22-25 event.
“It’s a really fine line, and it’s a really difficult decision, but we’ve made the decision to proceed ahead,” said Lori Silva, executive vice president of retail for Emerald, which organizes ASD Market Week. “We feel like we are doing everything we can to ensure the safety of everybody.”
But she noted that decision is subject to change if the coronavirus situation worsens in Las Vegas.
“If there was a massive cluster going on, yes, we’d have to take a step back and revisit whether that balance of short-term safety and long-term economic safeties is still right,” she said.
Likewise, the Republican Jewish Coalition has not scrapped its annual leadership meeting, including an address from President Donald Trump, planned for mid-March in Las Vegas.
Matt Brooks, the coalition’s executive director, said the decision heeds the Trump administration’s advice to go about normal routines while following basic hygiene prevention methods.
“We are giving all of our attendees a little bottle of Purell,” he added.
The proceed-as-normal mindset appears to be prevailing in the sports world as well — at least for now.
The Raiders also did not respond to a request for comment, though a statement provided to The Nevada Independent from the Vegas Golden Knights hockey team — which routinely draws more than 18,000 fans to home games — said the organization plans to continue normal operations.
“We are closely monitoring the situation while following recommendations and guidance from the CDC and NHL. At this time, we are continuing our normal operations,” the statement said. “We advise our fans, program participants and staff to continue employing the same precautions they do during cold and flu season, encourage them to stay home if they feel sick and frequently wash hands thoroughly as they would do to avoid any communicable illness."
And in Washington state, where the coronavirus spread has been most acute in the U.S., season ticket sales for a soon-to-come NHL team in Seattle have been postponed amid lingering questions over the virus’ short-term effects.
Even so, the U.S. Chamber of Commerce and representatives from the travel, hotel, airline and retail industries tried to assuage consumer fears during a news conference Wednesday.
“Our response has to be grounded in fact and not fear,” Chamber Chief Executive Tom Donohue said. “What we’re telling our members...is the same advice we are following ourselves. Be prudent, be prepared and don’t overreact. We should be guided by the facts and the advice from medical experts and the federal, state and local officials who are dealing with this situation. That largely means business as usual with limited exceptions.”
The U.S. Travel Association projects international inbound travel to the U.S. will fall 6 percent over the next three months as a result of the coronavirus outbreak and will cost the U.S. economy about $3 billion.
The decline would be the largest in international inbound travel since the 2008 financial crisis.
But Roger Dow, president of the U.S. Travel Association, said he expects travel to snap back once the crisis abates.
“There's going to be a short term, a few folks, and I say a few relative to the masses, that will stay away, but it's going to pop up bigger than ever,” Dow said after the Chamber event. “And what happens is that they put off travel, they don't just say ‘I'm not going to do it.’ They say, ‘I'll do it, not this week, but I'll do it next.’ I'd be naive to say there's not going to be a small drop, but it's going to come back pretty fast.”
He also said that Chinese travelers are also starting to come back, which is an important market for places like Las Vegas. Traditionally, about 80 percent of Las Vegas visitors come from within the United States, while foreign tourists make up the other 20 percent.
Ultimately, Las Vegas’ reputation as the “escape capital of the world” may help during this period, Vassiliadis said. Domestic travelers who postpone elongated trips overseas may be more inclined to schedule a shorter getaway to Las Vegas.
“This is where people come to leave their worries and burdens behind,” he said.
On the Las Vegas Strip, tourists who spoke to The Nevada Independent remained nonplussed — if not a bit more aware of how often they were washing their hands.
“I’ve been reading about it, but it hasn’t been an issue where I live,” tourist Susanne York said. “Other than when my husband went to Costco to get toilet paper, they were all out.”
Updated March 8, 2020 at 10:45 a.m. to reflect a second case announced in Washoe County.
Updated March 8, 2020 at 2:55 p.m. to reflect a third case in Clark County.
Dumpsters overflowing with glass, stacks of plastic cups with a gold crown resting on top, and rainbow cubes of compacted aluminum are among the maze of obstacles in this underground lot, made more overwhelming by the unceasing noise – shouting, beeping and the roar of truck engines.
Brittany Price deftly navigates the Aria food waste and recycling dock, undaunted by the machinery and mess and unbothered by the smell permeating the air. She flips open the lid of a bin nearby to reveal it is stacked to the brim with empty oyster shells — just another odd prop found behind the scenes of one of the largest hospitality companies in the world.
Price is the director of sustainable operations at MGM Resorts International, a role in which she oversees food waste and recycling programs for the hospitality chain, which is the largest employer in the Las Vegas Valley. The Aria is one of 12 resorts she oversees in Las Vegas.
Price has been working for MGM for 13 years and first got involved with their environmental sustainability programs five years ago. She says it was the birth of her son that first inspired her to get involved.
“I have a 7-year old-son and a 4-year-old daughter, and when my son was born I started to rethink everything, and for me that really started with food and our food system,” she said. “I had to take a step back and say, ‘what can I do personally to help with this much broader issue than just food, but the environment in general and wanting to make the world a better place for him?’”
Every major resort company on the Strip have Corporate Social Responsibility (CSR) initiatives at a corporate level. In order to better enact these initiatives, every individual MGM resort has its own CSR Council. Working at the Luxor at the time, Price joined the property’s green team and began work with the environmental division before eventually moving on to the job she holds today.
This is no small job. Between the 12 resorts on the Strip, MGM operates more than 4 million square feet of convention space, 450 restaurants and buffet-style employee dining halls for all 50,000 of its employees, producing in 80 tons of food waste every day.
Between 2008 and 2018, the resort company diverted 200,000 tons, or about two-thirds of its total food waste, away from landfills. Instead, the waste has been used for composting, sent to pig farms, and most recently, thanks to a partnership with Three Square food bank, has been donated to those in need.
The major resort companies in Nevada are huge sources of food waste in the state. Las Vegas Sands estimates that 23 percent of the waste produced at The Venetian resort is food waste.
Katarina Tesarova, the vice president of global sustainability for Las Vegas Sands observes that the volume and variety of food waste produced by resorts on the Strip makes it vital for companies to develop comprehensive strategies to reduce their waste production and divert the waste that is produced away from landfills.
"From full meals that are prepared ahead of time, such as for banquets or conventions, but never served and have to be discarded, to waste that starts right at the preparation stage, such as trim and peel waste, the potential for waste is there at nearly every turn,” said Tesarova. “So it’s necessary to have a multifaceted strategy to truly address it and prevent it wherever possible.”
Las Vegas Sands has been making efforts since 2015 to reduce food waste, according to Tesarova. The company enlists creative strategies to reuse foods and minimize waste, including using unserved bread from conventions in a bread pudding recipe for team member dining rooms. Since 2015, The Venetian has reduced food waste by 29 percent.
Food waste is a crucial topic in Nevada, a state where one in eight households are food insecure, according to the 2018 annual report by the Nevada Council of Food Security. The council was first created in 2014 through an executive order by the governor, and in 2019, lawmakers passed a bill that formally set membership and operating guidelines.
The same bill, SB178, also created the Food for People, Not Landfills program as a part of the Department of Health and Human Services. The bill intended to create formal committees focused on reducing food insecurity by minimizing waste and ensuring that food that can be donated, is donated.
Crushed cans and bins of bottles
Recycling programs are something many resort companies in Las Vegas have invested in. Caesars Entertainment say it has diverted 397,000 tons of recycling away from landfills since 2012, and Las Vegas Sands’ Venetian Resort has a recycling rate of 56 percent.
And, while MGM has also heavily invested in these programs, walking through an MGM resort, you won’t be able to find a recycling bin.
“You may find that odd as a company that is environmentally minded like we are,” Price said. “But it’s actually by design.”
Instead of having resort-goers sort their own recycling, every MGM resort has at least one recycling dock that is staffed 24 hours a day. The employees at these docks, who are hired through a partnership with RENUoil of America, a Las Vegas-based company that has partnered with hospitality companies to process recycling for nearly 20 years, hand-sort the recycling from the trash that is brought in.
“That really allows us to maximize our overall diversion rates,” Price said.
Hand sorting the recycling prevents recyclable materials from being mistakenly sent to a landfill and prevents non-recyclables from being mixed in with the recycling. There are more than 20 recycling docks between the MGM resorts. Mandalay Bay alone has 11 in order to deal with the volume of waste produced by their convention space.
Over 50,000 tons of recycling are produced annually by the resorts, and between 2008 and 2018, 450,000 tons of recycling was diverted from landfills.
Source reduction and food donation
All food waste from MGM Resorts is transported to their waste docks in unlined yellow bins. The yellow color lets employees know not to put any other kind of trash in these bins, because glass or plastics would prevent the food waste from being effectively recovered.
In dealing with this waste, MGM adheres to the Environmental Protection Agency’s (EPA) Food Recovery Hierarchy, which ranks methods of waste reduction and use from most to least preferable.
At the top of the hierarchy is the most preferable option — source reduction. Source reduction is a concept that is heavily pushed in the buffet-style dining halls that all MGM resort employees can use.
Signage throughout the halls reminds employees not to put more on their plates than they intend to eat in order to avoid that food being wasted.
However, source reduction is a difficult task for MGM when it comes to food in their restaurants and client-serving programs.
Part of Price’s role as director is making events more sustainable and working with convention clients to consider the environmental and societal impact of the choices they make in the planning process. However, there are some impacts that planning cannot alleviate.
“As a company, we have an obligation to serve the client,” said Price. “If they tell us that 1,000 people are coming to eat, and we have a contract with them to feed 1,000 people, we need to have that amount of food available. However, there’s a no-show factor that we can’t always account for.”
For the most part, food from employee dining halls and from most restaurants owned by MGM is then diverted to livestock farms to feed pigs or used for composting.
In order to deal with the inevitable surplus food at their conventions, however, MGM began partnering with Three Square food bank, a non-profit based in Las Vegas focused on solving food insecurity in Southern Nevada. MGM identifies food and beverage events that are likely to have a large surplus of food, and Three Square is able to collect the food that has been unserved and untouched. The food is then blast chilled and stored frozen before being used at community events or distributed at food banks.
Since 2016, MGM has donated 1.2 million pounds of food — the equivalent of 1 million meals. They have an overall goal to put 5 million pounds of food into the community by 2025.
Other resort companies on the Strip participate in similar programs, including Las Vegas Sands which has donated more than 250,000 meals since 2014.
20 million oysters and $20 forks
There are other initiatives that MGM has recently introduced in order to make their operations more sustainable. Every recycling dock has its own asset recovery station where employees can pull out resort property such as reusable glass and plastic cups, utensils, and any other mistakenly thrown away item to be thoroughly cleaned and returned to the resort.
Price emphasized the importance of this for helping the resorts keep costs down, noting that one fork mistakenly thrown in the trash can be worth upwards of $20.
MGM is also making an effort to use compostable materials such as single use plates and utensils. It can be a challenge to find compostable materials that are properly suited for a desert environment because often, widely used compostable materials don’t break down in this climate. MGM employs a preferable purchasing policy, looking into what products have the lowest environmental impact in order to determine what items to use in their resorts to ensure that they can be properly disposed of.
Additionally, MGM has been making efforts to assist in oyster restoration projects. The National Harbor Resort opened outside of Washington, D.C. in 2016, and it was at this time that MGM became aware of the problems with shrinking oyster populations around the world. Oysters are a natural source of water filtering, but across the world they are about 85 percent extinct.
Oysters populations grow when new oysters attach to old shells. However, when oysters are harvested and the shells are removed, new oysters have nothing to latch onto.
By partnering with different organizations in that region, MGM is able to send empty oyster shells from their resorts all over the country, including Las Vegas, to be used in reintroduction efforts. Since 2017, the company has been able to divert 76 tons of oyster shells, enough to grow 20 million new oysters.
The Nevada Resort Association, an advocacy group for the gaming and resort industry in the state, has a coalition focused on environmental and social initiatives, made up of representatives from more than 70 resorts.
In late 2019, the coalition formed a food security working group.
“It’s a really exciting time because all of our competitors and peers on the Strip — Caesars, Sands, Wynn — we’re all sitting together at a table talking about the issues surrounding food insecurity and food donations and how we can collectively come together as a unit to help drive and scale food donations even more within our city,” said Price. “It’s amazing to see all of us coming together to help drive this very important cause.”
Tesarova is a co-chair of the association’s environmental coalition and leads the food security group.
“This all means I help lead the rest of the group in identifying the most meaningful initiatives that we should collectively take on to improve the lives of people in Southern Nevada,” said Tesarova. “Together, we’re focusing on developing and implementing efficient processes for transferring our respective resorts’ unused and unserved food to those in need in our community.”
Tesarova believes that an important part of coordinating between resort companies to supply nonprofits with food is that it allows those nonprofits to redirect the resources they had previously used to purchase and prepare food.
Additionally, the company intends to increase the rate at which they divert materials from landfills from its current rate at just under 50 percent to 60 percent by 2025 and 75 percent by 2030. MGM’s 2025 and 2030 environmental sustainability goals are also displayed on their website.
While it can be complicated and costly to make these sweeping changes in these large resort companies, Price feels they have an obligation to continue these efforts and work towards a more sustainable future.
“Food is really a core, essential part of our business,” said Price, “Because of that, we think that it’s our responsibility to help solve some of these really complex issues surrounding food.”
With roughly six months to go before construction of the $1.9 billion Allegiant Stadium is completed, the new Las Vegas Raiders have finalized a deal to power their new home through a unique, discounted and renewable-based electric rate provided by NV Energy.
The proposed contract and pricing system were given a thumbs up from the state’s Public Utilities Commission in a draft order released last month and was officially approved on a 2-0 vote during the commission’s Wednesday meeting.
Approval commits the stadium and team administrative and practice facilities to a long-term, discounted electric supply arrangement with the utility, through a new and limited system only available to a handful of other large energy-users.
It’s also another win for the state’s primary electric utility, which has spent a significant portion of the last two years backing policies to make it more difficult for large customers to leave utility service while also offering direct cash payments to woo municipalities into staying as electric customers.
In a statement, NV Energy spokeswoman Jennifer Schuricht said the utility was pleased to have developed a "customized energy solution" for the team that would see them served with the equivalent of full renewable power.
"We appreciate the thorough review of this agreement by the Public Utilities Commission of Nevada, the Regulatory Operation Staff of the PUCN and the Bureau of Consumer Protection to achieve an end result that is not only good for the Raiders, it will benefit all NV Energy customers and support the growth of the southern Nevada economy," she said in an email sent after the PUC voted to approve the order.
The adopted contract settles a roughly 16-month saga that initially saw the Raiders file to leave NV Energy in September 2018 through a state law allowing large power users to depart the utility and purchase power from an alternative electric supplier, after paying a usually substantial “impact fee” to hold other utility customers harmless.
The “704B” law (named for its place in the Nevada Revised Statutes) has also been used by major businesses in the state, including MGM Resorts, Caesars Entertainment and Wynn Resorts, but was substantially overhauled in the 2019 Legislature.
In October 2019, the team and NV Energy filed an application with the commission for a proposed contract and pricing system — dubbed “MPE,” for “Market Price Energy tariff” — that would see the team receive discounted “market-based” electric rates for a period of 25 years, based on power produced by future solar and battery generation power plants.
The “MPE” pricing structure will have an initial phase-in period prior to construction of new renewable generation, expected to be finished by the late third or early fourth quarter of 2023. Initially, power for the stadium and team facilities would come from energy bought by the utility on the wholesale market or excess capacity from NV Energy’s current fleet of power plants.
The contract also requires NV Energy to purchase and retire “Green-e Credits” in an amount offsetting the Raiders’ overall electric use. (Green-e is an environmental standards service that verifies clean energy sales.)
Once the renewable energy facilities are built, the contract switches to a new pricing structure with a fixed, flat per-megawatt energy cost based on market prices, and includes the price of natural gas transportation and to procure enough credits under the state’s Renewable Portfolio Standard to offset all electric facility consumption by the Raiders. The actual price of power is redacted in documents filed with the PUC.
The commission’s draft order contains some differences from the initial application filed by NV Energy and the Raiders, including a listed prohibition on current utility customers or businesses taking electric service from an alternative provider from enrolling in the new system. It also clarifies that any future “MPE” applicants would need to have their rates and charges set in an energy supply agreement, which will require PUC approval.
It also allows the stadium to escape paying all public program costs save the Economic Development Rate Rider, but requires the team’s practice facilities to pay “all current and future” public program costs, including surcharges to help pay for renewable programs and low-income energy assistance. The stadium’s estimated payment for that public program surcharge is just $714 annually.
Despite the discounted rate and special pricing structure, NV Energy argued in paperwork filed before the commission that the arrangement would be beneficial overall because it would provide a stable source of revenue over an extended period of time and provides more renewable energy for the state. It also cited an analysis that the arrangement would benefit other customers by about $2.65 million over 25 years because of reductions in a deferred utility account.
The order will also require that NV Energy give 80 percent of any monetary proceeds from a “Customer Margin Benefit” agreement with the team to its other customers, and can itself keep 20 percent. It would be defined as a “negotiated amount that is charged in addition to the cost of energy in the short term and the cost of the renewable resource in the long term,” but the actual amount is redacted in documents filed with the PUC. The initial application called for a 50-50 split.
As part of the contract, NV Energy agreed to not seek any “impact fee” assessed against the Raiders for departing normal utility service. The contract also includes provisions requiring the Raiders to remain with NV Energy as a full-service customer, with a limited ability to use “behind-the-meter” generation if it is only used by facilities that are not interconnected with the utility’s electric grid, do not reduce the organization’s electric load by more than 1 percent and “does not diminish the perception that NV Energy is the Raiders Facilities electricity provider.”
Updated at 10:51 a.m. on Wednesday, Jan. 29 to reflect that the Public Utilities Commission adopted the draft order during their meeting. Updated again at 3:37 p.m. to include a statement from NV Energy.
STATELINE – Mont Bleu, a resort that has gone by three names and had five owners in 41 years, is playing a central role in the future of the South Lake Tahoe gaming market.
Eldorado Resorts CEO Thomas Reeg said the Reno-based company will need to sell at least one of the three casinos it will own in Tahoe once a $17.3 billion merger/buyout of Caesars Entertainment is completed early next year.
Las Vegas-based Caesars owns the market’s two dominant properties, Harvey’s Resort and Harrah’s Tahoe, which are connected via a pedestrian tunnel underneath Highway 50. Eldorado controls Mont Bleu, which the company acquired last year as part of its $1.8 billion purchase of Carl Icahn’s Tropicana Entertainment.
South Tahoe has two other casino-resorts; privately held Lakeside and Hard Rock Lake Tahoe, which is owned by Las Vegas-based Paragon Gaming.
On paper, the combination of Eldorado and Caesars covers roughly 60 gaming properties in 18 states, including 18 casinos in Nevada. The merger is full of potential antitrust violations in several jurisdictions.
Reeg mentioned the community on the company’s third quarter earnings conference call in November. He said “Northwest Louisiana and in the Tahoe area” are “markets where you should expect us to be active” in terms of a casino sale prior to the deal closing.
Most gaming observers believe the nearly 500-room Mont Bleu, which borders a portion of the Heavenly ski resort at the corner of Highway 50 and Lake Parkway, is on the market once again. Analysts, however, won’t say a deal for the property is all but certain.
“It’s pretty clear that management wants (the Caesars merger) to get closed as soon as possible and is willing and ready to dispose of any assets that need to be removed,” Stifel Financial gaming analyst Steven Wieczynski told investors following the earnings call.
Eldorado owns the operations of Mont Bleu. The land and buildings are leased from Edgewood Companies, which also owns Edgewood Golf Course. Eldorado entered into a 15-year lease for the property with renewals of up to 20 years.
SunTrust Bank gaming analyst Barry Jonas said in an interview that South Lake Tahoe is small in terms of gaming numbers. South Tahoe reported $66.1 million in gaming revenue in 2018, compared to the Las Vegas Strip - $6.5 billion - and Reno - $636.9 million.
“Investors don’t really focus on the area materially,” Jonas said
Tahoe gaming and tourism officials hope they can change that view.
Mont Bleu is providing its northern parking lot for construction of an events and conference center community leaders believe helps the market become less dependent on gaming revenues, which have diminished because of Northern California’s Indian casinos.
Carol Chaplin, CEO of the Lake Tahoe Visitors Authority, said South Lake Tahoe’s casino business has softened since California tribes entered the gaming business. Tahoe needs a different reason for visitors to come back. Space inside the conference and events center has been designed to include meetings and conferences of various sizes with ability to seat 6,000 for concerts, 4,500 for sporting events and 2,000 for large banquets.
“We’re not a gaming destination right now and the conference center also allows us to reinvent our economic base and drive mid-week business to the market year-round,” Chaplin said. “We’re not competing with Reno. This is not a large center, but it’s the right size.”
South Lake Tahoe’s casino market peaked in 2000, when the region collected $141 million in pre-tax gaming revenues. The next year, revenue fell 16 percent mostly because of tribal gaming. South Tahoe continued a gaming revenue slide that saw declines in eight out of the next 15 years, including dips of 11 percent in 2008, 23 percent in 2009, and 11 percent in 2010.
Gaming Control Board Senior Research Analyst Michael Lawton said the declines were “due to Indian gaming and of course the Great Recession.” In addition to the five casinos, the area referred to as the “South Shore” has three additional reporting properties, including a Dotty’s slot parlor located on Highway 50 next to Harrah’s.
Through November, gaming revenues are down 3.3 percent compared to 2018, which saw the market collect almost $66.2 million in gaming revenue – less than half of what Tahoe produced nearly two decades earlier.
Neither Caesars nor Eldorado report individual casino totals from its Tahoe properties on the company’s quarterly earnings statements. Caesars breaks out financial results from its nine Las Vegas casinos and includes Tahoe in the “Other U.S.” category. Eldorado includes Mont Bleu in the company’s West Region, which includes the company’s three casinos in Reno, Tropicana Laughlin and two casinos in Black Hawk, Colorado.
One gaming insider suggested Caesars’ Harvey’s-Harrah’s combination “already has the monopoly” on the Lake Tahoe market, which is a reason Mont Bleu is being shopped.
“We believe Eldorado remains comfortable with its ability to dispose of single assets in Tahoe and Shreveport (Louisiana), at multiples that promote financial deleverage,” Deutsche Bank gaming analyst Carlo Santarelli said in November.
Eldorado said it will achieve cost savings of $500 million in the first year following the merger.
Changes to the Tahoe landscape
Eldorado has made a few cosmetic changes to Mont Bleu since acquiring the resort. The company is more focused on adding amenities to its three Reno properties, Eldorado, Silver Legacy and Circus Circus, which is referred to as “The Row.”
Caesars has focused efforts on room renovations and facility enhancements in Las Vegas.
Paragon acquired 68 percent interest Hard Rock Lake Tahoe in November 2016 and franchised the name from Florida’s Seminole Indian Tribe. The property, known over the years as Sahara Tahoe, High Sierra Resort and Lake Tahoe Horizon, is flourishing, said CEO Scott Menke. He said the company upgraded the 25,000-square-foot casino and 539 hotel rooms that offer views of either Lake Tahoe or the Heavenly ski runs.
Hard Rock is a short walk to the conference center site that he termed a “game changer” for the Lake Tahoe.
“The town has nothing like it, and you have to be prepared 365 days a year,” Menke said. “To be able to accommodate special events and conferences makes us a true destination. It adds to everything else the market has to offer.”
The Legislature approved the funding mechanism for the project, which allows the visitors bureau to impose a $5 per night room tax on all hotel, motel, and short-term vacation rentals in the Tahoe Township. The tax, which kicked in July 1, is expected to raise $91 million to pay off the construction bonds.
Casinos in Stateline backed the legislative effort and Mont Bleu is providing the land.
Chaplin said additional approvals are needed from the Tahoe Regional Planning Authority. She hopes construction will begin in May with an 18-month building timeline. A project manager has been hired for the development.
“It’s nice amenity that will not only drive visitation, but also provide jobs,” Chaplin said.
She is hopeful the center will help attract non-gaming businesses to Tahoe. In the most recent Gaming Abstract covering fiscal 2018, South Tahoe collected 54 percent of its revenues from gaming. In major Nevada gaming areas, non-gaming revenues move the needle. Statewide in fiscal 2018, resorts received 57.2 percent of their revenues from hotels, restaurants, retail and entertainment. In Las Vegas, the non-gaming revenue figure was 66 percent.
“We need to become destination (market),” Chaplin said.
The California side of Highway 50 is what she would like the Nevada side to copy.
In 2012, Vail Resorts management acquired the company that owned Heavenly and two other ski areas for $18 million. The ski resort was upgraded, and the changes led to an investment that included retail, restaurants, improved lodging, and a pedestrian mall.
“It used to be kind of dumpy, but now it looks nice and it’s one of the best things about the area,” said former Harrah’s Entertainment CEO Phil Satre, who was in charge of the company when it purchased Harvey’s in 2000.
“When I started, Lake Tahoe was really rocking,” Satre said. At the time, the company owned just Harrah’s Tahoe. “The recession and Indian gaming took its toll on the market. I’d love to see Tahoe take off again.”
Hard Rock picked up on the pedestrian mall idea and created Guitar Plaza at the property’s front entrance. The space is adjacent to a tavern, is marked by a giant guitar and offers outdoor seating and dining, as well as live and pre recorded music. The patio is the only outside event space in the South Tahoe corridor.
Mont Bleu rival?
Menke and other business leaders want to see how the Eldorado-Caesars deal influences South Tahoe.
Eldorado has been in an acquisition mode since 2014, when the company acquired West Virginia-based MTR Gaming. Subsequent deals for its Reno casinos, Isle of Capri Resorts, an Illinois riverboat and Tropicana Entertainment, created a regional casino giant ahead of the Caesars announcement in June.
Menke became associated with the Carano family, founders of Eldorado, when he was with Circus Circus. The companies co-developed Silver Legacy.
“It seems like they have been in transition for the past year,” Menke said. “They are taking on a gargantuan transformation of their company.”
Park Cattle Co. opened Mont Bleu in 1978 as Park Tahoe. It was acquired by Caesars World a year later and renamed Caesars Tahoe. A $40 million investment completed the hotel. The resort was managed as a smaller version of Caesars Palace in Las Vegas.
When Caesars was acquired in a $9 billion merger with Harrah’s Entertainment, Caesars Tahoe was sold for $45 million to Columbia Sussex in 2005 to avoid federal antitrust scrutiny. The property was renamed Mont Bleu a year later. Icahn acquired the property in 2010 when Columbia Sussex went bankrupt and it became part of Tropicana Entertainment.
Eldorado has been paring down properties in certain markets so the Caesars merger can meet Federal Trade Commission approval. The company sold two Missouri casinos and a West Virginia racetrack this month and has a deal to sell a Kansas City casino and Mississippi property.
Most expect Mont Bleu to join that list.
“Tahoe is a great market and it continues to change,” Menke said. “There is a lot of opportunity.”
Howard Stutz is a freelance gaming reporter for The Nevada Independent and the Executive Editor of CDC Gaming Reports. He has been a Nevada journalist for 30 years. He can be reached at firstname.lastname@example.org. On Twitter: @howardstutz
Until recently even avid NFL fans would have been hard-pressed to give you an in-depth read on Josh Shaw.
Although in his fifth season in the league, the cornerback from USC hadn’t made much of an impression in the professional ranks. Selected in the fourth round by Cincinnati in the 2015 draft, he seldom started. He bounced from Cincinnati to Kansas City, and then on to Tampa Bay. This season found him in Arizona, squatting on the Cardinals’ injured reserve list.
Shaw vaulted from professional obscurity to undeniable notoriety last month after it was discovered he’d placed a three-team parlay at Caesars Palace on NFL games in violation of league rules. He suddenly found himself on the front page of the sports section without intercepting a single pass. Which is a good thing since he’d only accomplished that feat once in his career.
After a league investigation confirmed he’d bet on other games, the NFL hit him on Nov. 29 with a suspension of more than a year. That’s a total of 21 games. Although this past week it was reported that Shaw appealed, don’t be surprised if the image-conscious NFL finds a way to make an even greater example out of him. It would be easy enough to do – especially since he’s not a star player. Due to that injury, he was little more than an overpaid fan this season. From the look of things, his shoulder injury also impaired his good sense.
To make matters worse for him, Shaw even bet against Arizona in that infamous three-teamer at Caesars. Forget playing for the Cardinals again. Imagine the reception he’d receive in the locker room from fellow players. Who would want to take the field with a person willing to play an angle against his own team?
Bottom line: Shaw was made to order for suspension – and for the league to show it’s still deadly serious about its image when it comes to gambling enforcement.
A clear-cut decision is also important for the legal bookmakers who are finally enjoying unprecedented acceptance across the country. At a time when state after state is jumping on board, the last thing anyone needs is the scent of scandal. Although it’s not always reported in the press, Nevada sports books for years have played important roles in providing information that has led to the exposure of suspected game fixes. It’s an old tune, but the last thing the legal side wants is even a whiff of question about the credibility of the games.
Back when Nevada was the only state with legalized sports gambling, the NFL publicly remained averse and extremely sensitive to any proximity to the bookies. Forget the fact gamblers were part of the league since its inception and players had often been linked to bookmakers. Although Alex Karras and Paul Hornung were suspended in 1963 for gambling on football, and Baltimore quarterback Art Schlichter was sanctioned for gambling on the game two decades later, others linked even tangentially to illegal bookmakers – as most of them have been outside Nevada – suffered huge hits to their public image. Outlaw bookie Don “Dice” Dawson’s ties to Kansas City quarterback Len Dawson (no relation) and Detroit passer Bobby Layne haunted their hall-of-fame playing careers.
Although it’s often been criticized for inconsistent enforcement of its own rules, and accused of hypocrisy for vilifying Nevada’s legal sports book industry, the league has much to gain in properly handling the Shaw incident.
It’s not the first time the NFL has looked askance at him. Shaw concocted a wild story about saving a drowning family member to cover up for injuries he suffered associated with a dispute with a girlfriend. He sprained his ankles after jumping from a second-floor hotel balcony to avoid the police.
He later told si.com prior to the 2015 draft, “Everything that happened in the past is solely because of me…They (NFL officials) want to look me in the eye and have me look them in the eye and tell the truth.”
A little more truth might go a long way in 2019.
Because I’m left wondering whether the Shaw story goes anywhere from here. Perhaps not.
But let me speculate briefly.
It’s not much of a stretch to presume that a sidelined player would keep in touch kept with his teammates, and perhaps even the Cardinals training and medical staff. I wouldn’t be surprised if NFL security has checked, or at least wants to know, whether Shaw pumped players or team officials for information on pre-game injuries, attitudes and intangibles. Because that’s what a guy who was willing to bet against his own team would do.
Nobody asked, but I’d be double-checking his cell records.
Some will call the suspension excessive and remind you he was an inactive player placing a sports bet in a state where such gambling is legal. There was no sign of a sports fix or something really ominous. So it’s no big deal, right?
It probably sounds naïve in a nation so undeniably obsessed with sports betting, but there’s a lot more at stake than the faltering career of an underperforming cornerback. Not just for the league, but for the multibillion-dollar sports book industry, too.
If the suspension sets the right example, then I’m betting it’s the biggest thing Josh Shaw ever accomplishes in the NFL.
John L. Smith is an author and longtime columnist. He was born in Henderson and his family’s Nevada roots go back to 1881. His stories have appeared in Time, Readers Digest, The Daily Beast, Reuters, Ruralite and Desert Companion, among others. He also offers weekly commentary on Nevada Public Radio station KNPR. His newest book—a biography of iconic Nevada civil rights and political leader, Joe Neal—”Westside Slugger: Joe Neal’s Lifelong Fight for Social Justice” is published by University of Nevada Press and is available at Amazon.com. Contact him at email@example.com. On Twitter: @jlnevadasmith
The Southern Nevada Water Authority is proposing a 10-year marketing deal with the future Las Vegas Raiders that will pay the NFL franchise more than $30 million in tax dollars over the next decade, enabling the agency to use team logos and place advertising in the $1.9 billion Allegiant Stadium.
The deal, which is up for approval at the water authority’s board meeting on Thursday, is worth $2.5 million with an automatic annual four percent increase that will see the annual payment top out at about $3.5 million by 2029.
Scott Huntley, a public services senior manager with the authority, said that the marketing contract price was the same for a group of roughly 20 “founding partners” including Caesars Entertainment, Desert Ford Dealers and Cox Communications that have initial advertising rights at the Allegiant Stadium, which is partially funded by $750 million in Las Vegas hotel room taxes.
Huntley said the Raiders had contacted the water authority’s general manager John Entsminger about potentially advertising in the new stadium earlier this year, and that the two sides have been in contract negotiations since July.
The proposed contract is a major expansion of the SNWA’s marketing budget with professional sports teams; agency spokesman Bronson Mack said the water authority’s advertising budget with UNLV, minor league baseball team Las Vegas Aviators, Las Vegas Lights FC and the National Hockey League’s Golden Knights is only about $500,000 in total. SNWA’s total advertising campaign for water compliance and conservation is roughly $4.9 million a year, he said.
But Huntley said the proposed advertising contract would reap many positive water conservation benefits for the authority, including an estimated 169 million impressions and would help SNWA target a larger and more diverse audience of Raiders fans than a normal marketing campaign or through partnerships with other sports teams.
“It is a big, big audience and it is an audience that we very much would like to get to,” he said.
The contract gives the water authority wide advertising privileges — focused on water conservation and restriction programs — at the stadium and during NFL games, including the ability to place English and Spanish television ads for games controlled by the Raiders and other ads during other team television and social media programming.
The contract buys the regional water authority digital and physical advertising spaces on TV, radio, social media and physically at the stadium, including the sponsorship of a two-minute warning, a large sign in the stadium’s main concourse and a “marquee signage package” allowing SNWA material to appear on a team-operated billboard near the stadium on Interstate 15.
On the digital side, the contract affords the SNWA branding and a rotating advertisement on the team’s desktop, tablet and mobile sites (plus the team’s official app) with an entitlement of 1 million impressions a year, plus rights of up to 250,000 15-second pre-roll advertisements on the team’s digital platforms. It also guarantees a full page color advertisements in the team’s gameday magazine.
The water authority would also be designated as the “presenting sponsor” of the team’s final non-nationally televised preseason game. The contract also allows the water authority to have advertising privileges in bathrooms throughout the upper and lower concourse of the stadium; something Huntley said was advantageous given the connection to water in bathrooms and the presence of a “captive audience.”
“We like to use a lot of humor in our advertising and the jokes in bathrooms almost write themselves,” he said.
The contract will also give the authority license to potentially use Raiders players in advertisements — something that SNWA used to great success with Golden Knights fan favorite Ryan Reaves in a television ad with more than 117,000 views on YouTube. Mack said the agency had the “exact intention” to use the Raiders in the same way in future advertising and marketing material.
“We're hit with over 5,000 ads and messages a day as Americans from media, and you only have that 1.3 (to) 1.5 seconds to capture that attention and get that message through and cut through the noise,” he said. “And that's one of the things that Ryan Reeves really helped us do, because those ads are so over the top, and really kind of silly...but those ads are cutting through the noise and they're getting people to stop (and) listen to the message.”
Mack added that the water authority had found in research that in residential homes, the individual most often responsible for setting or changing the sprinkler clock is a male, making sports advertising (and its predominantly male audience) suitable for conservation messaging.
“Utilizing sports and communicating through sports is just a great way for us to reach that target demographic,” he said.
The contract also gives the SNWA the ability to use various designations, including “Official Water Conservation Partner of the Raiders” and “Official Water Conservation Partner of Allegiant Stadium.”
Additionally, the contract requires the Raiders to annually donate $600,000 for the installation or upgrade of two Clark County School District football fields from grass to synthetic turf. The school district will select which fields to upgrade. The contract allows the Raiders to make “reasonable efforts” to secure NFL grants for similar donations and for the schools to use turf previously used by the Raiders.
That portion of the contract also requires the Raiders to invite a “mutually agreed number” of SNWA Youth Advisory Council for a tour of the stadium, including an appearance by a Raiders executive, a catered meal and a social media post by the team.
The SNWA will also receive some other benefits through the contract, including guaranteed annual appearances by six Raiders alumni, six appearances by at least two Raiderettes and three appearances by the Raider’s mascot. The appearances are limited to an hour, must be in Clark County and specific alumnus and Raiderettes are up to the team’s discretion.
The contract also gives the SNWA an annual $100,000 “Activation Fund” credit, which can be used to purchase stadium tour tickets, rental of the team’s practice facility, advertising inventory and other “mutually agreed inventory.” The water authority is the latest public agency in the state to become financially involved with the Raiders, who agreed to move to Las Vegas after state lawmakers in 2016 approved allocating $750 million in hotel room taxes to fund construction of the stadium.
RENO – Phil Satre and his wife, Jennifer, were planning their next visit to a U.S. national park when Elaine Wynn approached the long-time gaming figure more than a year ago about joining the board of Wynn Resorts as it dealt with allegations of sexual harassment and assault against CEO Steve Wynn.
Visiting national parks became a bucket list endeavor for the Satres after watching the Ken Burns produced and directed mini-series, The National Parks: America’s Best Idea, on PBS.
After 25 years in chief executive and board level positions with casino giant Harrah’s Entertainment and another 10 years as the chairman of gaming equipment manufacturer International Game Technology – seeing both companies through multi-billion-dollar mergers – travel to uniquely American locations such as Maine’s Acadia National Park and New Mexico’s Carlsbad Caverns were soothing experiences.
Now, Wynn Resorts’ largest shareholder wanted Satre, one of the gaming industry’s most respected leaders, to prop-up a foundering casino company encircled by a myriad of regulatory and legal issues stemming from the legal complaints against now-former chairman and CEO Steve Wynn. Ex-wife Elaine Wynn was in a contentious battle with the company’s board and filed a lawsuit to regain a seat that she lost in 2015. The casino operator was less than a year out from opening a $2.6 billion resort in Boston.
Satre wasn’t sure whether he wanted to step into the quagmire.
“I told Elaine I needed to give this some thought,” Satre said recently during a wide-ranging interview in which he talked about the company’s future, the surprising merger of Eldorado Resorts and Caesars Entertainment and his history with the president of the United States.
At the time Elaine Wynn approached him, Satre was chairman of gaming equipment giant International Game Technology and was considering stepping aside after 13 years. He wasn’t looking to join another gaming board.
“When I went through the process of whether or not I should pursue this, I looked at the company’s assets and concluded the vast majority of the employees loved working there, customers were loyal, and management had taken steps to make changes,” Satre said.
“My only condition was (that) I wouldn’t come in if the board was still litigating with Elaine,” Satre said. “I wasn’t going to get into the middle of a fight between the company and Elaine. I would come in if there was a clear deck.”
In August 2018, Elaine Wynn dropped her lawsuit, agreed to cap her ownership stake in the company at 9.9 percent and entered a “standstill agreement” through 2020 in which she would not challenge the board’s decisions.
Satre became vice chairman of the Wynn board and chairman three months later. He immediately brought decades of gaming industry credibility to the troubled company.
“I think they were probably in need of some experienced supervision,” said gaming analyst David Katz, who follows Wynn Resorts for Jefferies Group. “We had posed questions about where the company was headed, was there going to be a proxy fight? In that regard, he brought in the credentials to calm things down.”
Closing in on a year as Wynn chairman, the company is still dealing with fallout from the Steve Wynn sexual harassment matter. Two new lawsuits were filed against the company by employees last month. In a statement, Wynn Resorts said the “claims appear to be those already thoroughly investigated by the special committee (set up by the company) and regulators; no new claims of this type have been received by the Company since the close of the investigations.”
Satre has settled into a role as a “traditional” non-executive chairman.
“For a period there I was much more active dealing with regulatory issues in Nevada and Massachusetts, and representing the new board,” Satre said. “I was also getting up to speed on the company. I had been away from the operating side of the industry for a long time. I hadn’t been to Macau in ages. Steve is gone, but I’m not saying I replaced Steve. We have a new corporate governance structure and I feel pretty good about it.”
He helped steer the company through its regulatory matters in Nevada and Massachusetts, paying a total of $55 million in fines that ended discipline complaints. His appointment solidified the management team, led by CEO Matt Maddox. Encore Boston Harbor opened to high profile fanfare in June.
“We’re now developing strategic initiatives,” Satre said. “The cadence is more that of an operating company rather than all the angst we were going through.”
During an hour-long interview in his Reno office – a converted mansion overlooking the Truckee River and Barbara Bennett Park – Satre, 70, discussed several gaming industry topics.
After leaving Harrah’s, Satre bought the Joseph H. Gray House, which was originally built in 1911 for the Reno department store owner. It was listed in 1987 on the National Register of Historic Places.
Satre converted the building into his law offices and installed a 1920’s roulette table he had in storage for decades in his conference room. He later learned that similar tables made by the manufacturer were rigged by Al Capone and the mob during the prohibition era.
He briefly served on the board of Tabcorp Holdings, an Australian gaming company, and joined IGT’s board in January 2009, becoming chairman 10 months later. Satre also held board positions outside of gaming, including a term as chairman of NV Energy and 13 years with retailing giant Nordstrom, Inc.
Wynn is now his only board position.
Sitting at the roulette table, Satre agreed with Katz, who said the investment community believes the next challenge for Wynn is to “clearly articulate and establish a plan for growth.” But the Wynn business model and the historic Harrah’s business model he over saw for 25 years are vastly different.
Satre said Wynn’s expansion opportunities “are limited.” The company is focused on international opportunities and “destination cities,” similar to Boston. “If a city like Miami would take bids, we would be interested,” he said.
Wynn is making a concerted effort to win one of the three gaming licenses in Japan. In Macau, where the company has three resorts, Wynn is spending more than $2.5 billion on the Crystal Pavilion complex adjacent to Wynn Palace on Cotai. The glass and steel structure includes two hotel towers with 1,300 rooms, a theater, an Asian gourmet food pavilion and art sculpture gardens.
Earlier this year, Satre supported a brief effort by Maddox to have Wynn Resorts acquire Crown Resorts of Australia, which included casino-hotels in Melbourne and Sydney.
“We belong in big destination cities,” Satre said.
In Las Vegas, Wynn reopened the renovated Wynn Las Vegas Golf Course following its nearly two-year closure and expanded convention facilities. The company will eventually build on the 34-acre former New Frontier site it owns across the Strip from Wynn Las Vegas and Encore.
“We like that piece of property we have a lot of ideas but we’re not ready to discuss them,” Satre said. “Getting the golf course back was critical to our positioning we have there.”
Satre said Wynn is not interested in acquiring any of Caesars Entertainment casinos that Eldorado Resorts might put on the market through the companies pending $17.3 billion merger, including those in Nevada. The company is closely following North Strip developments, including the $4 billion Resorts World Las Vegas that is expected to open at the end of 2020 and the nearly $1 billion Las Vegas Convention Center expansion, which will follow in 2021.
“Anything north of Wynn and Encore is good for us,” he said.
Satre had several thoughts on the pending Eldorado-Caesars merger that will create a gaming conglomerate with 60 properties in 18 states under multiple brands, including Caesars, Harrah’s, Eldorado, Horseshoe and Bally’s.
In a way, Satre has skin in the game.
He’s known the Carano family, founders of Reno-based Eldorado, for decades. He played a major part in building Harrah’s from three casinos in Reno, Lake Tahoe and Las Vegas, to a regional gaming giant that acquired Caesars Entertainment in 2005 for $9 billion during his last year as chairman.
“Eldorado’s strategy is very similar to the Harrah’s strategy,” Satre said. “You build distribution. You build customer relationships. You capitalize on those customer relationships across markets. And you build up the brand. If I had one do-over, I would probably want more clarity on the brands.”
Satre set Harrah’s on a steady expansion course, entering Atlantic City, opening nearly a dozen riverboat casinos, adding Indian gaming management deals, and buying Horseshoe Gaming, which included the World Series of Poker.
Earlier on, Satre and his executives laid out a chart for gaming expansion across the U.S., building a range of cases from optimistic to low end.
“I think where we ended up was the most realistic case for expansion that we had planned out,” Satre said.
Satre said Eldorado “has a pretty good track record” from its previous acquisitions – MTR Gaming in 2014, Isle of Capri Casinos in 2017 and Tropicana Entertainment last year.
“It’s an interesting operational and executional challenge,” Satre said of the Caesars transaction. The deal strengthens Eldorado’s position in Nevada. The company operates five casinos in the state – three in Reno and one each in Laughlin and Lake Tahoe. The merger gives the company 13 more Nevada properties – nine in Las Vegas, two in Lake Tahoe and one each in Reno and Laughlin.
His advice for Eldorado, which will soon own many of the casinos Satre-led Harrah’s either built or acquired, is to clearly differentiate between the brands. He suggested a layered approach, similar to Hilton Hotels, which has brands for different customer classifications, including high-end luxury and tour-and-travel-type properties.
“Clarity of the brand is very important and it’s one thing I would look at if I were sitting in their shoes,” Satre said. “Staffing levels, restaurants, and capital investments, all of those items fall in line under where a brand fits into customer expectations. I believe that’s the one thing we should have done better at Harrah’s.”
Satre and Trump
Satre was one of a handful of gaming executives who founded the Washington D.C.-based American Gaming Association in 1994, serving as chairman in 2003 and 2004.
He was elected to the Gaming Hall of Fame in 2003 after he retired as Harrah’s CEO, and eight years after then-Atlantic City casino owner Donald Trump was inducted. He had many dealings with Trump after Harrah’s entered the East Coast casino market in the 1980s over the construction of what became Trump Plaza.
Harrah’s and Trump were partners in the Boardwalk development but “were at loggerheads” throughout the construction. Satre, Harrah’s point person, said the companies couldn’t ever agree on anything.
Harrah’s pulled out of the project shortly after the opening.
“The companies didn’t have a good relationship, nor did I have a good relationship with Donald,” Satre recalled. “We dissolved the partnership and sold our interest back to Donald, basically what we paid for it. There wasn’t any value in it and it wasn’t doing well.”
In November 2016, shortly before the election, Satre authored a commentary for the Reno Gazette-Journal, urging Nevadans “to reject” Trump’s candidacy for President, saying he was “appalled by the very thought he could become our president.”
In the commentary, Satre recalled a correspondence with Trump that was a “characteristic of the bluster, threats, intemperance and unsupported and unsupportable falsehoods” that he experienced with Trump during the 1980s.
“There were some idiosyncrasies at that time that we see today,” Satre said. “Both companies where I was executive chairman (Nordstrom’s and IGT) heard from the (Trump) campaign (to complain about the commentary.)”
Howard Stutz is a freelance gaming reporter for The Nevada Independent and the Executive Editor of CDC Gaming Reports. He has worked as a Nevada journalist for 30 years. He can be reached at firstname.lastname@example.org. On Twitter: @howardstutz