New events center, potential casino sale could boost prospects for South Tahoe market

Casinos with mountains in the distance in South Lake Tahoe

By Howard Stutz

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.”

Changing market

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 howardmstutz@gmail.com. On Twitter: @howardstutz

Many former elected officials and public employees have made their way to the marijuana industry

The interior of the Nevada Legislature

Nevada’s system of regulating marijuana was born in the halls of the Legislature. So perhaps it isn’t surprising that many who wander those halls, sit through hours of hearings to develop a regulatory structure and stay current on the latest twists and turns of cannabis law wind up involved in the industry themselves.

Records released through SB32 this spring reveal a number of former lawmakers and lobbyists on the list of owners and board members of marijuana companies. Among them are two who reached speaker, the highest post in the Assembly, but had become lobbyists by the time the Legislature authorized dispensaries.

“The experience that former elected officials, former lawmakers, former bureaucrats have with state agencies and how they operate, I think is helpful in advising and moving things forward in a way that is actually appropriate for our state,” said Democratic former Assembly Speaker Richard Perkins, who served in the Legislature from 1992 to 2006.

Nevada shifted from having the Department of Health and Human Services oversee dispensaries to the Department of Taxation in 2017. Understanding the differences between those two agencies was an important skill, he said.

John Oceguera, also a former speaker who left the Legislature after the 2011 session, is a board member with Las Vegas Wellness and Compassion LLC and represented 11 different cannabis companies in the 2019 legislative session. He said he thinks the company sought him out as a board member because of his knowledge in the regulatory arena and his public safety background as a firefighter.

There are also former mayors and council members whose skill sets could be helpful in navigating local government approvals. Municipalities have the power to enact moratoriums and approve local permits for individual businesses, so the fate of a business can sometimes hang on how well its leaders navigate local government politics and processes.

“You want people on your team to help you in the guidance through the rough water, and cannabis is a rough industry,” said Rebecca Gasca, a lobbyist and owner with Wendovera LLC. “So you want to rely on people who know how to get you where you want to go. They have the compass. They’re the compass holders. You’re the boat. And you trust them. And it makes sense because you haven’t been in their shoes.”

Also on the list are at least three people with intimate knowledge of marijuana regulation — one is Deonne Contine, who until February 2018 headed the Department of Taxation that oversees marijuana businesses. Although she is listed as a board member for Sierra Well, she says she was never a bonafide board member and was listed as a potential secretary while working as a private sector lawyer on Sierra Well’s unsuccessful applications for five dispensary licenses in 2018.

Reporting from the Nevada Current suggests there may have been a lapse in communication about Contine’s status that resulted in her name still being on a list that says it’s current through Aug. 1, 2019. She says that had the company won a dispensary license, it would still need to update its records and confirm bona fide board members.

Critics have questioned the propriety of Contine being involved in the industry at all because of her close ties to the regulation-development process. But Contine, who served as head of the Department of Administration in Gov. Steve Sisolak’s cabinet until her abrupt resignation last week, insists that she’s not running afoul of ethics law that calls for a “cooling-off” period for former public employees.

“No. I was working as a lawyer in the private sector and was thinking about issues that were active at the department (in any area) and if there were any conflicts related to my private sector legal work,” she said in an email to The Nevada Independent.

She added that she is no longer interested in working in the private sector and hopes to someday return to the public sector.

“I have spent much of my life dedicated to public service and ultimately realized rather quickly after working as a lawyer in the private sector for a few months that I am more suited to making sure systems and processes run smoothly and my heart is in public service and policy,” she said.

Below are some notable names in the political realm who are leaders in the cannabis industry.

Mynt dispensary in Reno

Mynt dispensary in Reno is seen on Nov. 9, 2019. Photo by Mark Hernandez.

Several former state legislators have a stake in the industry, including David Goldwater, an owner at Inyo Fine Cannabis Dispensary LLC. He is a former Democratic member of the Assembly and now a lobbyist.

Former Assemblywoman Lucy Flores, a Democrat who ran an unsuccessful bid for Congress in 2016, is a board member at GreenMart of Nevada.

Then there’s Sandra Tiffany, an owner at GWGA LLC and a former Republican state senator who served 14 years in the Legislature. She’s a businesswoman who established a nuclear medicine image processing company and worked at a large computer-aided design and engineering firm.

One-term Republican Assembly member Scott Sibley, an owner at Nevada Holistic Medicine LLC, is a real estate broker and a reporter with Nevada Legal News, a subscription-based website that publishes news stories, public notices and other public records.

Mark James is an owner with LVMC C&P LLC and LVMC LLC. He served in the Legislature from 1992 to 2002, and on the Clark County Commission from 2003 to 2007. In 1995, James wrote Nevada's "Truth in Sentencing Law," reducing the possibility that prisoners could get early release. He also authored Nevada's "Megan's Law" to notify the community when a sex offender has been released from prison. His time as CEO of Frias cab company was marked by a contentious breach of contract lawsuit. He is now is CEO of Integrity Vehicle Solutions, which developed the Ride Genie app that allows passengers to hail cabs.

Former Assemblyman Chad Christensen, a Republican who served from 2002 to 2010 and ran an unsuccessful bid for U.S. Senate in 2010, is an owner with Fidelis Holdings. He told the Las Vegas Review-Journal in 2014 that although he is a member of The Church of Jesus Christ of Latter-day Saints, which opposes the use of marijuana except for medicinal use, he became a supporter of medical marijuana after seeing his wife’s friend suffer from using prescription painkillers.

Josh Griffin, a former owner with Livfree Wellness LLC who has since left the industry, served as a Republican member of the Assembly in 2003 and is a lobbyist whose clients in the 2019 session included the City of Reno, City of Elko and casino companies MGM Resorts and Eldorado Resorts (casino companies are strictly prohibited from involvement in the marijuana industry). He is the son of Jeff Griffin, who served as Reno’s mayor for eight years.

High-ranking legislative leaders on the rolls include Oceguera, a former owner at Exhale Brands Nevada II LLC and current board member at Las Vegas Wellness and Compassion LLC. He is a lobbyist and the former speaker of the Assembly who ran unsuccessful bids for Congress in 2012 and 2016.

And then there is Perkins, an owner at Nevada Holistic Medicine LLC and Nevada Natural Medicines LLC and the former Speaker of the Assembly. He worked as a police officer starting in 1984 before becoming chief of police in Henderson and retiring in 2008. He is now president and chief lobbyist for The Perkins Company, a firm whose clients include Newmont Mining and the City of Henderson.

Perkins said he’s long supported medicinal marijuana after his stepson battled cancer in the early 1990s. But coming around to support recreational marijuana was a longer evolution. After conversations with narcotics officers, he has come to believe that marijuana is not a gateway drug when it’s brought out of the shadows and isn’t only available through criminal activity.

Family members of political figures include Ross Goodman, an owner with Paradise Wellness Center LLC. He is a criminal defense attorney and the son of Las Vegas Mayor Carolyn Goodman and former Mayor Oscar Goodman.

Mayor Carolyn Goodman has been known to abstain from marijuana-related policy discussions, such as a debate about cannabis consumption lounges in the city, because of her son’s involvement.

Mynt dispensary in Reno

Las Vegas Mayor Carolyn Goodman and her husband, former mayor Oscar Goodman, ride in a pink Cadillac during the annual Veterans Day parade in downtown Las Vegas on Sunday, Nov. 11, 2018. (Daniel Clark/The Nevada Independent)

On the other end of the state, Catherine Cashell-Mannikko, daughter of former lieutenant governor and Reno Mayor Bob Cashell, is an owner at Livfree Wellness. She told the Reno Gazette-Journal she got into the business because medical cannabis has helped her daughters, and as an investment opportunity.

John Griffin is a former owner at Livfree Wellness LLC who said in 2014 that his father had relied on medical marijuana to alleviate the symptoms of Parkinson’s disease. Griffin is a lobbyist whose clients include casino companies.

Lori Rogich, a Las Vegas-based attorney, is a former officer with Deep Roots Medical LLC. She is married to Sig Rogich, a Republican political consultant, the founder of prominent advertising and lobbying firm R&R Partners, and a former U.S. ambassador to his native Iceland.

In 2014, the revelation that Sig Rogich was a minority owner in a marijuana company was one of the most surprising that came out of a license application period in Clark County. Rogich was a senior White House adviser to President George H.W. Bush from 1989 to 1992 and also advised President Ronald Reagan, who in 1980 said marijuana “is probably the most dangerous drug in the United States.”

"It was 30 years ago, a lot has changed," Sig Rogich said in 2014.

Former local government figures include Larry Scheffler, an owner at MM Development Company Inc. He is a former councilman for Henderson who founded the commercial printing company Las Vegas Color Graphics, Inc. in 1978. He also has served as a commissioner on six major commissions in Southern Nevada government. 

His business partner Robert Groesbeck, an owner at MM Development Company Inc, served as the mayor for the City of Henderson from 1993 to 1997. He has practiced law for more than 25 years. 

Mynt dispensary in Reno

The Nevada Legislature as seen on June 4, 2019. (David Calvert/The Nevada Independent)

Lobbyists who have a stake in the industry include John Sande III, an owner at Nuleaf. He’s an attorney at the firm Fennemore Craig, and previously was chairman of First Independent Bank of Nevada. He played football for four years at Stanford.

Legislative observers may remember Rebecca Gasca for her past work as a lobbyist for the ACLU of Nevada. She is now CEO at the lobbying firm Pistil + Stigma, which helps businesses navigate the cannabis regulatory process, and is an owner at Wendovera LLC.

Other lobbyists include Tia Dietz, who works with government affairs firm The Griffin Company and was a registered lobbyist in 2017, and Piper Overstreet-White, who was a lobbyist for Uber in 2018. Both are board members at Livfree Wellness. 

Amy Ayoub, an officer with Deep Roots Medical LLC, is a former political fundraiser and public speaking coach.

Two lobbyists for Barrick Gold are part owners of a marijuana company. Judith “Be-Be” Adams is an owner with HSH Lyon LLC (High Sierra Holistics), as is Sean Gamble, who also lobbies for a coalition of Boys and Girls Clubs.

Serial participants on state boards round out some of the ownership. Luther Mack, an owner at Nevada Wellness Center LLC, was a longtime operator of McDonald’s and Popeyes franchises. Previously, he held positions in several state government agencies, served on the Nevada State Athletic Commission for 13 years, served as the chair of the University of Nevada, Reno Foundation and on the board of Boyd Gaming. 

He said he got into the marijuana world as a business opportunity, but also appreciated the benefits he found when using CBD cream for muscle soreness after workouts, and finds many former athletes are customers at his business.

Tisha Black, a Republican who ran unsuccessfully in 2018 for the Clark County Commission seat held by Justin Jones, is a board member at Clear River LLC. She is a lawyer in Las Vegas, and the founding partner at the Black & Lobello law firm. After years of involvement in the state’s medical marijuana program, developing regulations and helping companies file applications for their marijuana business licenses, she took the helm as president of the Nevada Dispensary Association in 2019. 

Former state employees who are now involved in the industry include Chad Westom, a board member at Forever Green LLC who was previously the bureau chief of the Nevada Division of Public and Behavioral Health until October 2017, according to his LinkedIn profile. As such, he oversaw the state’s medical marijuana program before it was transferred to the Department of Taxation.

On the website for his company, Westom touts that experience to potential clients, saying “built Nevada’s first-ever marijuana regulatory structure from 2013 through 2017, and oversaw the licensing and opening of all of Nevada’s marijuana establishments.”

Lisa Vick, who works as a compliance officer and board member at Clark Natural Medicinal Solutions, notes on her LinkedIn profile that she was an auditor with the Nevada Department of Taxation until February 2018. In that job, she said she would “audit all inventory and procedures for Dispensaries, production, cultivation, and laboratories for medical and recreational marijuana in the State of Nevada.”

Jodie Snyder, Riley Snyder, Michaela Chesin, Taylor Avery, Trey Arline and Zach Murray contributed research to this project.

Satre was ‘experienced supervision’ needed to save Wynn Resorts

Wynn Resorts Chairman Phil Satre

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.”

Wynn future

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.

Eldorado-Caesars deal

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 howardmstutz@gmail.com. On Twitter: @howardstutz

Business, education meetings dominated Sisolak's calendar amid legislative session

Governor-elect Steve Sisolak and his wife, Kathy, tour the Governor's Mansion in Carson City

In retrospect, May 21 was one of the most important days of the 2019 Legislature.

A bill getting rid of a scheduled reduction in the state’s payroll tax was introduced for the first time; lawmakers voted out bills adding Nevada to the National Popular Vote Compact (later vetoed) and decriminalizing abortion; and long-awaited hearings were finally held on bills creating a cannabis regulatory agency and substantially overhauling the state’s K-12 education formula.

Gov. Steve Sisolak was similarly busy on May 21, but for different reasons. Amid a packed schedule that saw him attend a wildfire status briefing and the cannabis bill hearing, the governor was also busy on the second-to-last Tuesday before the end of the Legislature calling several high-profile business and gaming executives — Eldorado Resorts’ Gary Carano, Peppermill Resorts President Billy Paganetti and Ultimate Fighting Championship COO Ike Lawrence Epstein.

Described by his office as general check-ins, the scheduled calls were part of a slew of calls made by Sisolak as the legislative session drew to a close, indicating that the governor kept open lines of communication with top business leaders even as lawmakers approved bills raising the minimum wage and requiring large private employers to offer paid sick leave — panned as anti-business by Republicans. 

Those meetings and others held between Sisolak with high-powered lobbyists, legislators with major pending bills, federal government officials and a slew of well-known business leaders were revealed in a public records request submitted by The Nevada Independent for the governor’s calendar through the legislative session.

Meetings scheduled in Sisolak’s calendar don’t necessarily confirm that they actually happened, and often provide few details as to the point or reason for them. But information on the scheduled meetings of the state’s first Democratic governor in two decades provides insight into the power structure and important relationships that define and influence what laws and policies are (or aren’t) adopted.

“The calendar provided to The Nevada Independent is the Governor's working calendar, maintained by staff,” Sisolak spokesman Ryan McInerney said in an email. “Some of the calendared appointments occurred as scheduled, others did not occur at all, or were managed entirely by staff. Moreover, travel schedules for the Governor, First Lady Kathy Sisolak, and the Governor's family were redacted to ensure the safety of the Governor and his family.”

Although he positioned himself as a natural successor to popular and moderate Republican Gov. Brian Sandoval on the campaign trail, meetings scheduled by Sisolak throughout the legislative session included comparatively more meetings with labor leaders and other constituencies of the Democratic Party. They also reveal details about which individual interests were able to secure time with the governor ahead of major decisions on bills affecting energy, collective bargaining for state workers and health care issues.

But like Sandoval, many of Sisolak’s scheduled meetings show the names of the same Carson City power brokers, lobbyists and business leaders who continue to wield the same influence and effect on the legislative process, regardless of the party in power.

Not all details of Sisolak’s calendar were made public — at least 67 events on the calendar provided to The Nevada Independent were redacted. Sisolak’s office said that in addition to travel, the office also redacted telephone numbers and personnel information such as start and end dates.

Here’s a look at the people, groups and constituencies Sisolak met with during the 2019 legislative session.

Legislative interactions

Sisolak made an effort to meet with all 63 members of the Legislature during the first few weeks of the legislative session — a hectic schedule reflected in the early February weeks of his calendar.

But meetings held with lawmakers outside of those initial meet and greets shine a light on Sisolak’s involvement in the legislative process beyond just signing bills.

The lawmaker who scheduled the most meetings with Sisolak was Democratic Sen. Chris Brooks, who previously served one term in the Assembly and is married to Sisolak’s chief of staff, Michelle White.

Brooks and Sisolak met three times — once on March 13 (the day Sisolak announced the state would sign onto an agreement to follow the Paris Climate Agreement), again with legislative leaders on March 15 and a final meeting on April 2 (the day a hearing was held on SB358, which raises the state’s Renewable Portfolio Standard to 50 percent by 2030). 

Brooks confirmed in an interview that the meetings were related to several bills related to energy that Sisolak had identified as priorities on both the campaign trail and in his State of the State address. He said early on that he and White had established a “firewall” and worked with other staff in the governor’s office to arrange meeting and discuss strategy.

“We were pretty adamant about making sure she wasn’t involved personally,” he said.

Other meetings held between Sisolak and individual lawmakers include:

  • A March 27 meeting with Republican Assembly Leader Jim Wheeler and Blockchains CEO Jeff Berns, described by the governor’s office as a meet and greet that veered into a discussion of issues with wild horses
  • An April 30 meeting with Democratic Assemblywoman Teresa Benitez Thompson, related to her bill AB400, which removed certain types of taxes from possible economic abatements. The bill was signed into law by Sisolak.
  • A May 17 meeting with Assembly Judiciary Chair Steve Yeager on AB553, the bill creating the Cannabis Compliance Board. Yeager presented the bill in committee about a week later; it was later signed into law by Sisolak.
  • A May 22 meeting with Senator Julia Ratti on her dental therapy bill, SB366. The bill was amended twice after the meeting and eventually signed into law by Sisolak.

Lobbyists

Sisolak’s meetings with lawmakers merely tap the surface of his involvement in the legislative process; the Democratic governor met with dozens of lobbyists or representatives for various interests groups throughout the entire 120-day session.

Notably, Sisolak recorded holding a short meeting with National Shooting Sports Foundation executive Larry Keane and the group’s state lobbyist, Patrick McNaught, on April 18. 

The meeting came nearly a week before lawmakers approved major changes to a major gun safety bill by Democratic Assemblywoman Sandra Jauregui, AB291, that initially sought to allow local governments to pass more restrictive gun laws than those put in place by the state (a concept called pre-emption).

But the concerns of the NSSF, which holds the annual SHOT tradeshow in Las Vegas, helped almost sink the bill, and contributed to the removal of that language from the bill. Lawmakers instead added in provisions creating a “red flag” law process, which lets law enforcement and family members petition a court to temporarily seize a person’s firearms if they present a danger to themselves or others.

The NSSF itself issued several warnings about Sisolak in the run-up to the 2018 election, noting that he had promised to institute a long-stalled voter-approved gun background check initiative and to ban assault weapons. NSSF spokesman Mark Olivia said that the meeting was similar to ones the group had across the country and in Washington D.C. with other elected officials, and that the organization was grateful that Sisolak took the time to listen to their concerns.

“This is what any trade association is going to do to make sure their concerns are heard,” he said.

Other major lobbyists that Sisolak met with during the legislative session include:

  • Former Assembly Speaker turned lobbyist Richard Perkins and clients on February 19 in Las Vegas
  • Former state senator, current lobbyist Warren Hardy on February 19
  • A meet and greet with the Jewish Federation and former Rep. Shelley Berkley on March 5. Both supported a bill, AB257, that would have authorized creation of a Holocaust memorial museum in Nevada; the bill failed to pass
  • Former Rep. Dr. Joe Heck on March 8
  • Dwayne McClinton on behalf of Southwest Gas on March 19
  • Golden Entertainment, Dollar Loan Center and Republic Services lobbyist Sean Higgins on March 27
  • Barrick Gold Corporation executives Christina Erling and Rebecca Darling on April 17
  • Kolesar and Leatham lobbyist Joe Brown on May 6
  • Nevada’s Women Lobby lobbyist Marlene Lockard on May 15
  • Griffin Company lobbyist Josh Griffin (and “group”) on May 20 
  • Las Vegas Metro Chamber CEO Mary Beth Sewald on May 23, to discuss “legislation relating to Nevada employers,” a spokesperson for the Chamber said
  • Ferraro Group founder Greg Ferraro and former Fennemore Craig lobbyist Jim Wadhams on May 29, in a meeting regarding pending bills and the close of the legislative session. Wadhams also met with Sisolak on April 1.

Greg Smith

Within hours after Democratic Assemblyman Mike Sprinkle announced he was resigning from the state Legislature over multiple claims of sexual harassment, Gov. Steve Sisolak was already meeting with his eventual successor — though the governor’s office claims it was just a coincidence.

While reporters scurried and stalked the legislative building in attempts to find Sprinkle or get comments from other lawmakers on his resignation, Sisolak had scheduled a meeting with Greg Smith — the husband of former Democratic state Sen. Debbie Smith. The meeting on March 14 came two weeks before his appointment to the Assembly and over a 15-person field of candidates who filed to replace Sprinkle. 

But Sisolak’s office said the meeting was just a coincidence; Smith was brought in to advise the office on several pending bills related to apprenticeship programs (Smith is a retired union apprenticeship program administrator.) Smith did not return several calls seeking comment on the meeting.

Education

On the campaign trail, few organizations were more helpful to Sisolak than the Clark County Education Association, which endorsed the future governor early in the campaign and spent more than a million dollars in third-party campaign ads ahead of the 2018 election.

Once in office, Sisolak’s door was open to the teacher’s union and its polarizing leader, John Vellardita. The governor and Vellardita met or called at least twice (once on March 14 and again on April 8), and held a meet and greet with CCEA educators on April. In contrast, the Nevada State Education Association (which endorsed Sisolak’s primary opponent) held a scheduled meeting with Sisolak just once, on March 19. 

And in a legislative session defined by massive shifts to the state’s antiquated funding formula and calls for more funding, Sisolak also met with various school district and higher education leaders. He met with Clark County School District Superintendent Jesus Jara twice (once on March 4 and again on March 26), Washoe County School District lobbyist Lindsay Anderson on April 4, Nevada System of Higher Education Chancellor Thom Reilly on February 27, and UNLV President Marta Meana on April 24.

Sisolak also met with State Board of Education chair Elaine Wynn on May 21, the same day as the first legislative hearing on the revamped K-12 education formula.

Business interests

Calls to major business and gambling company executives took up a sizable amount of Sisolak’s time, especially as the legislative session drew to a close.

Sisolak’s calendars show meetings with Anthony Marnell (CEO of Marnell Gaming, which operates the Sparks Nugget) on April 10, Golden Gaming CEO Blake Sartini on April 21 and Grand Sierra Resort and SLS Las Vegas owner Alex Muerelo on May 9. One of his last calls made before the legislative session ended on May 27 was to Virginia Valentine, the director of powerful casino trade group the Nevada Resorts Association. Valentine said the call was to relay the gaming industry’s support for AB533, the bill to create the Cannabis Compliance Board.

Other notable meetings or calls arranged between business executives and Sisolak include:

  • Eli Lilly executives on February 12
  • Beau Wrigley, the heir to the Wrigley chewing gum fortune and CEO of Suterra Wellness (a cannabis company that operates in Nevada and other states) on April 1
  • Fidelity National Financial executive Peter Sadowski on April 10. Fidelity is owned by Bill Foley, the owner of the Golden Knights hockey team.
  • Former Nevada Cattlemen's Association president Joe Guild and lobbyist Richard Perkins on April 23. Both lobbied for Union Pacific Railroad
  • Kaempfer Crowell attorney Jennifer Lazovich on April 26

2020 Candidates

At least four of the Democratic presidential candidates met with or calling Sisolak during the legislative session, including billionaire philanthropist Tom Steyer, New Jersey Sen. Cory Booker and former Housing and Urban Development Secretary Julian Castro. Sisolak’s office also said he met with California Sen. Kamala Harris during her trip to Nevada, and that all candidate visits were accommodated based on the governor’s schedule and availability.

He also met with former New York City Mayor and billionaire Michael Bloomberg — who considered but ultimately decided against a presidential run — on February 26, after state lawmakers approved a bill implementing a long-stalled gun background check law. Bloomberg helped fund the group that backed the initial ballot question in the 2016 election.

Sisolak said during an AFSCME forum earlier this month that he wasn’t sure whether he would endorse any candidate before the state’s presidential caucus in February.

Federal government

Unlike his predecessor Sandoval, who in the 2017 legislative session scheduled calls or meetings with at least 17 Cabinet secretaries and other high ranking officials in Trump administration, Sisolak made relatively few calls to officials in the Trump administration during his first legislative session.

Sisolak arranged a call with former Acting Interior Secretary David Bernhardt on Feb. 5, and another call with former Labor Secretary Alex Acosta on March 28, the same day Nevada joined a group of states intervening in a lawsuit defending the constitutionality of the Affordable Care Act.

Sisolak also scheduled a call with Delaware Sen. Tom Carper on April 30, the same day he sent a publicized open letter to Carper and Wyoming Sen. John Barrasso to reiterate the state’s “strong opposition to the Yucca Mountain project” (Barrasso and Carper serve on the U.S. Senate Committee on Environment and Public Works).

Grants management lawsuit

Sisolak’s office also scheduled a meeting entitled “Streamlink Discussion” on April 15, a day after The Nevada Independent published a story detailing how litigation brought by Streamlink had gummed up a grants management software contract that state officials believed could help tap into millions of dollars worth of federal grants.

Although the state took no immediate action after the story was published, Carson City District Court Judge James Russell ruled against the state and in favor of Streamlink in May, leading the Department of Administration to announce it would drop future appeals and re-open bidding on the grants management software contract. 

The contract was reopened in July, and the office expects to have the system fully functional by 2021.

Celebrities

Sisolak’s calendar also shows meetings with higher-profile individuals than the normal slew of Carson City insiders.

The governor scheduled a meet and greet meeting with actress Patricia Arquette on March 8, the same day the actress attended a press conference with Democratic lawmakers on several equal pay bills. Sisolak’s office said the meeting was indeed scheduled but never actually happened.

On May 15, he scheduled a meeting with former football star Boomer Esiason on the topic of cystic fibrosis, a genetic disease that Esiason has highlighted through creation of a foundation after his son was diagnosed with the disease.

Sisolak also met with legendary labor organizer Dolores Huerta on April 3, and presented her with a proclamation. Huerta came to Carson City to testify in favor of a bill that would allow for physician-assisted aid-in-dying. The bill, SB165, failed to advance out of the Legislature.

Snyder Production 6.24.19 by Riley Snyder on Scribd

Reno casino operators: Market ‘transformed’ and ‘more stable’ as new competition springs up in Northern California

Potential competition coming from more than $1 billion of Indian casino development in Northern California isn’t causing Reno gaming operator David Farahi to lose any sleep.

If he ran a casino in Sacramento, however, Farahi says he would have concerns.

“California is already saturated,” said Farahi, chief operating officer of Monarch Resorts, which owns Reno’s Atlantis Casino Resort. He said the three new casinos, operated by Hard Rock, Boyd Gaming Corp., and Caesars Entertainment, and expected to open by 2020, will steal business away from Indian gaming properties in Sacramento and the Bay Area, rather than from Reno.

“The short answer is, no,” Farahi said. “Reno has a more diversified economy than before and we’re much more stable than the last time.”

The Atlantis in Reno, Nevada. (David Calvert/The Nevada Independent)

Farahi was referring to the mid-2000s.

The 2003 opening of the United Auburn tribe’s Thunder Valley resort near Sacramento, coupled with expansions at two nearby Northern California Indian gaming properties, decimated Reno’s gaming market.

Washoe County’s gambling revenues – Reno accounts for 75 percent of the market – hit an apex of $1.14 billion in 2000. A slow downward spiral began that year and was enhanced by the recession toward the end of the decade. When the bottom hit in 2012, Northern Nevada casinos had lost almost $400 million in annual gross gaming figures.

Now, in the eyes of the region’s business community, economic development leaders and gaming analysts, Reno’s casino business is in far better condition to weather competition from California.

“In my view, the new properties in California will have no impact whatsoever on Reno,” said Jefferies gaming analyst David Katz.

An economic upswing in Northern Nevada, thanks to an influx of large and small technology-based companies, has transformed Reno’s gaming industry from a tourism-dependent market into a traditional regional gaming destination driven by a local customer.

Mike Kazmierski, CEO of the Economic Development Authority of Western Nevada, said the move into the Reno area by some 200 companies has made the region less dependent on gaming.

“Reno has much different economy than in years past,” Kazmierski said. “The model is less susceptible to activity outside the market. Where this has helped the casinos, to some degree, is the growth in midweek business activity.”

Gaming revenues produced by Reno casinos have bounced back. The market has grown each of the last six years, including 2017’s 8.7 percent increase. Reno revenues were $636.9 million in 2018, an increase of 4.1 percent. Washoe County experienced 16 straight months of increases before the numbers declined in September.

“The growth trajectory the market has been on isn’t going to last forever,” said Michael Lawton, the Nevada Gaming Control Board’s senior research analyst. “Everybody believes a 3 percent yearly growth rate is realistic moving forward. The market is doing quite well.”

But it’s more than just slots and table games. Reno’s casino industry doesn’t resemble the 1990s and 2000s.

Older properties – such as Grand Sierra (formerly Bally’s Reno and Reno Hilton) and the Nugget in Sparks (formerly John Ascuaga’s Nugget) – were acquired by new operators who invested millions of dollars in upgrades, new restaurants, spas, entertainment and other non-gaming amenities.

The Nugget is building a $6.2 million, 9,000-seat outdoor amphitheater in downtown Sparks across from the casino that is expected to open this summer.

Home-grown Eldorado Resorts – which has expanded into the third largest regional casino operator in the nation with 26 properties in 12 states – hasn’t ignored Reno. The company’s three inter-connected downtown Reno properties across six city blocks – Eldorado, Silver Legacy and Circus Circus – have been dubbed as “The Row,” offering guests dozens of new non-gaming amenities.

The control board’s Fiscal 2017 Gaming Abstract showed that 51 percent of all revenues produced by casinos in Reno came from gaming activities. Ten years earlier, 54.3 percent of the revenues came from gaming.

Lawton said the market is slowly evolving, but it’s still not Las Vegas, where gaming revenues account for less than 35 percent of the total market.

The Eldorado in Reno, Nevada. (David Calvert/The Nevada Independent)

California competition

California is the nation’s largest Indian casino market, accounting for more than 26 percent of the nation’s tribal gaming revenues. According to economist Alan Meister, the state’s Indian casinos produced $8.4 billion in 2016, roughly $2 billion more than the Las Vegas Strip.

The current expansion is the largest in a decade and surrounds the state’s capital city.

Hard Rock, which is owned by the Seminole Tribe of Florida, is partnering with the Enterprise Rancheria of Maidu Indians on a $440 million resort in Yuba City, 30 miles north of Sacramento.

Caesars and the Buena Vista Band of Me-Wuk Indians are developing a $168 million casino 30 miles east of the city.

Boyd Gaming and Wilton Rancheria of Miwok Indians are building a $500 million complex in the Sacramento suburb of Elk Grove.

“Our location is ideally positioned to serve both the Sacramento and San Francisco Bay markets, making this project a significant opportunity for the tribe as well as our company,” Boyd CEO Keith Smith said on a quarterly earnings conference call in October.

All three properties are within a three-hour drive of Reno.

However, Macquarie Securities gaming analyst Chad Beynon doesn’t believe new casinos “over the hill and west on Interstate 80” will have the same impact on Reno the market experienced a decade earlier.

“Reno casino operators like to point out that you have to drive past all those casinos in Sacramento to get to Reno,” Beynon said. “That means a customer really wants to go to Reno.”

Farahi cited the 2013 opening of the Graton Resort near Santa Rosa, roughly 45 minutes north of San Francisco, as an example of Reno now being immune to California competition.

“We saw little if any effect from Graton on our business,” he said. “I think [Northern California Indian casinos] Graton, Thunder Valley, Red Hawk and Cache Creek will see the most impact from the new casinos.”

The number of visitors to Reno from California has diminished in recent years. The last visitor profile from the Reno Sparks Convention and Visitors Authority, dated 2015, showed California provided 32 percent of Reno’s visitors. In 2011, the figure was 39 percent.

Reno is drawing visitors from other markets, though, including the South and Midwest, and there is still a drive for convention business. The Reno Sparks Convention Center leadership is expected to approach the Legislature this year about funding for an expansion.

Meanwhile, the Reno-Tahoe International Airport has experienced 42 consecutive months of increased passenger travel. For the first 11 months of the year, passenger volume was more than 3.8 million travelers, up 4.9 percent over the same period last year.

A locals gaming market

Outside of Eldorado Resorts, which relies on tourism for 75 percent of its business, analysts said most Reno casinos focus on locals.

Farahi said Atlantis’ customer base is 55 percent locals. Beynon suspects others, including the 2,000-room Grand Sierra, approach 60 percent locals business.

Katz said the rejuvenated Reno economy has boosted the casino numbers. Higher wages and low unemployment mean people have a more disposable income for entertainment.

“It seems like the city has turned a corner,” Katz said.

Filling hotel rooms in Reno has not been a problem of late, either.

In the last 12 months, 29 companies moved their corporate headquarters to Reno. Kazmierski said these businesses average roughly 100 employees. Corporate meetings are big business for the midweek market. However, the area’s housing shortage has left many new utilizing hotel rooms for extended stays during the midweek.

Farahi said the hotel occupancy is somewhat a double-edged sword. Occupancy is solid, but operators can’t drive a higher rate.

“Reno is still very far away from the Las Vegas model,” Farahi said. “We’re not making as much of a profit from non-gaming and our gross gaming revenue is still 20 percent below the peak.”

As for any potential expansion in the Reno market, Station Casinos owns an eight-acre site near the convention center but stalled any development plans to focus on nearly $600 million in combined renovations to Place Station and Palms in Las Vegas.

Farahi said Monarch owns 40 undeveloped acres surround the Atlantis for expansion, but the company is currently focused on expansion of its hotel-casino complex in Colorado.

During the recession, there was a contraction in the Reno market. Several older casinos closed. SunTrust Bank gaming analyst Barry Jonas suggested the closing of additional older Reno casinos could give the market an additional boost.

“There really doesn’t seem to be any risk to Reno from the tribal gaming supply in California,” Jonas said. “What the market truly needs is a little more from the non-gaming side.”

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 howardmstutz@gmail.com. On Twitter: @howardstutz

Sisolak rakes in more than $2.3 million to campaign, PACs since elected governor

Gov. Steve Sisolak has raised more than $2.3 million through his campaign and affiliated PACs in the two months after being elected, including $100,000 from one casino mogul, and lent his campaign $250,000 just before his victory over Adam Laxalt.

According to campaign finance reports filed by Sisolak and two affiliated political action committees — Home Means Nevada PAC and Sisolak Inaugural Committee — on Tuesday, the new Democratic governor brought in more than $2.3 million through the three entities while spending a little more than $1.1 million in the last two months of 2018.

Under Nevada law, candidates are barred from accepting more than $10,000 from a single source during a campaign, but campaign donors typically avoid limits by making contributions through multiple entities or by contributing to PACs, which have no contribution limits.

Combined, Sisolak’s inaugural PAC, charged with putting on the new governor’s two inaugural gala events later this month, and the Home Means Nevada PAC, which managed Sisolak’s transition into the governor’s office, reported raising more than $966,000 over the two-month reporting period, with major contributions coming from just a handful of donors, including:

  • Health insurer Centene Management Company LLC, which contributed $25,000 to each PAC on Dec. 28
  • Golden Entertainment, which contributed $25,000 to each PAC on Dec. 28
  • The Las Vegas Metro Chamber of Commerce, which contributed $20,000 to Sisolak’s inaugural PAC and $10,000 to his campaign on Dec. 17
  • Democratic megadonor and former time share executive Stephen Cloobeck, who contributed $50,000 each to the Home Means Nevada PAC and Sisolak’s inaugural PAC on Dec. 21
  • Nevada Realtors PAC, which gave $50,000 to Sisolak’s inaugural PAC and $10,000 to his campaign account on Dec. 17
  • Developer and casino owner Marnell Gaming, which gave $25,000 to Sisolak’s inaugural PAC on Dec. 26 and $10,000 to the Home Means Nevada PAC on Dec. 20.
  • Nevada Property 1 LLC, which owns The Cosmopolitan hotel and casino on the Las Vegas Strip, gave $25,000 each to Sisolak’s inaugural PAC and the Home Means Nevada PAC on Dec. 28
  • Clark County lobbyist Jay Brown, a longtime friend and confidant of Sisolak, gave $15,000 to the new governor’s inaugural PAC and $10,000 to the Home Means Nevada PAC on Dec. 18. Brown made two $10,000 contributions to Sisolak’s campaign through himself and his law firm in 2017
  • The Las Vegas Paving Company, which gave $10,000 to the inaugural PAC on Dec. 29 and $10,000 to Home Means Nevada PAC on Dec. 28

Other top donors to the PACs including the Nevada State Democratic Party, which gave $100,000 to the Home Means Nevada PAC on Nov. 28, and $50,000 from the building trades union-backed Working for Working Americans PAC.

Large contributions also flowed to Sisolak’s campaign in the months after the election. Since Nov. 6, Sisolak’s campaign received fifty-two $10,000 donations, including $100,000 from ten companies associated with Alex Meruelo, the Reno businessman who owns the Grand Sierra Resort in Reno and the SLS Las Vegas.The companies include the Grand Sierra Resort, Meruelo Group, Meruelo Enterprises, Meruelo Media, Doty Bros Equipment Co., Herman Weissker Power, Herman Weissker, Neal Electric, KPWR Radio and Monterey Insurance. All donations were made on the same day; Nov. 28.

He also took in $20,000 in contributions from four separate Boyd Gaming properties, all on Dec. 13. The casino company also contributed another $25,000 to Sisolak’s inauguration PAC on Dec. 27.

He also received $30,000 from two Eldorado Resorts and two of its properties, Circus Circus Reno and Silver Legacy Reno on Dec. 11.

Sisolak also loaned his campaign $250,000 on Nov. 2, four days before the midterm election. He repaid himself for the loan on Dec. 20.

He spent a little over $1 million over the same time period, including the $250,000 loan repayment. Other major expenditures went toward advertising, polling, consultants and other expenses.

The two PACs reported significantly less spending; $84,000 expended by the inaugural committee, primarily paid to staff and $75,000 to the Aria Resort Casino, where one of the inauguration events will be held. Home Means Nevada PAC reported spending just over $87,000 of the $415,000 raised, with funds going to paid staff, consultants and several flights.

Former Republican candidate for governor Adam Laxalt reported receiving more than $44,000 throughout the period, although only a handful of small donation and one $10,000 contribution from a Pahrump-based nutrition supplement company came after the Nov. 6 election. Laxalt reported spending more than $487,000 over the last two months, including on consultants, staff and other expenses.

Jacob Solis contributed to this story. This article has been updated to include new information about Sisolak's inaugural PAC and Home Means Nevada PAC. Updated at 1:24 p.m. to correct Stephen Cloobeck's former profession.