When you heard the news last week that casinos in Atlantic City had shut down as a result of a state-government budget impasse, possibly you wondered about something similar happening in Nevada. For about a second.
Did the thought arouse a chuckle, maybe a good guffaw over a beer with friends? Of course, the casinos would never close. In Nevada, we close the schools over a budget impasse, not the casinos. Close the casinos ... sheesh.
All right, a few varieties of apples and oranges are tumbling off the table here. But the two net results give pause. In 2003, the threat of schools closing hung over Carson City as legislators sound-bit each other over taxes and spending. Last week, New Jersey Gov. Jon Corzine shut down the state government when the legislature could not deliver a budget in time, and included among "inessential workers" some 800 or so gaming regulators. Their furlough triggered the shuttering of casino operations.
"The New Jersey regulatory system is very hands-on compared to ours," says Nevada Gaming Control Board Chairman Dennis Nylander. New Jersey deploys 800 regulators to oversee a dozen casinos, while Nevada's GCB has 482 employees. More to the point, New Jersey does not permit casino operation without regulators on the premises—thus the shutdown. "While we're in the casinos on a regular basis," says Nylander, "we're not there 24-7."
And if they couldn't be there at all, the casinos would stay open. Nylander says he can't think of anything that would trigger the mass closing of casinos. "I think the law is really silent on this issue."
No doubt, for those inclined to cheer another victory for the libertarian spirit, the prospect of a New Jersey-style shutdown was anything but amusing. The Review-Journal's gaming correspondent, Chris Jones, put shutdown fears to rest in a July 6 article that nonetheless noted some local concerns. Boyd Gaming Corp. and MGM Mirage own Atlantic City's Borgata, and Harrahs Entertainment owns four other Boardwalk casinos. With the industry still reeling from Katrina's ravages, the Atlantic City shutdown could affect casino stocks, one consultant told Jones.
Of course, by closing the casinos, New Jersey deprived itself of $1.3 million a day in tax revenues, not-quite chump change in a $31 billion state budget. New Jersey taxes 8 percent of gross gaming revenue, plus other levies. Nevada claims 6.75 percent of gross gaming revenue, with localities adding about another 1 percent to the total, according to the American Gaming Association. But as Nylander points out, that accounts for 30 percent of Nevada's budget.
"Just don't see it happening here," says Jon Ralston, political analyst for the Las Vegas Sun, Ralston Report, and Face to Face with Jon Ralston. "Remember the legislature also only meets for four out of every 24 months, so it's unlikely it could get that bad. And if it did, a special session would fix it."
Just so they keep the schools open, too.