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Inside Gaming: 'Ahnold' Faces Tribal Battle In California

24 Jan 2005

Political leaders and state budgeteers around Los Angeles expect this will be a year of hardball negotiations between California Gov. Arnold Schwarzenegger and tribal casino operators. While "Ahnold" has cut his projections for revenues from tribal casinos drastically, from $1.3 billion to $16.3 million, tribal operators have wrung compacts out of the state that would let them give him more of a helping hand if they want. The question, they say, is how much is enough. More objective observers say the real question is whether the state has any right to the revenues, really taxes, at all.

*** Tribal leaders, meanwhile, say the issue of revenues misses the point. They see the real battles shaping up along the crowded highways into Nevada. They don't give a hoot about helping out the government in Sacramento, but they want to pick up extra change for their own pockets and for development on tribal lands. They'll use the potential for added revenues and profits to leverage financing and management contracts to build new casinos or improve the ones they have so that when the snow, sleet, rain and crowds hit, motorists have a lot of options short of sitting in traffic until they get to Las Vegas.

*** If you doubt the strategy, check out the San Manuel Indian Bingo & Casino, developed by the San Manuel Band of Mission Indians in Highland, Calif. It opens Friday, and despite the glitz, makes no pretense of challenging Las Vegas. In its marketing campaigns, it just claims more games, more restaurants and more parking than its competing tribal casinos in the state. It's almost a military strategy. Fortify the key trade routes, build the most convenient and attractive trading posts and forts and kill off the enemy.


At least in Southern California, where I've been stuck in medical treatments for the past two months, there's a strong feeling the dire Brookings Institution study on convention business is way wide of the mark. The study found the convention industry in sharp decline and poured cold water on cities adding more convention space. Insiders here, however, say location's the key. There's tremendous pent-up demand for convention space in Las Vegas with which no one can compete, insiders here say. Build more in Las Vegas and, for now, conventioneers will come. The time to strike, they say, is when you're hot.


MGM Grand has a great new advertising campaign: "Think of all the New Year's resolutions you'll break." Las Vegas is really in the same business as Disney, the business of fantasy. MGM Mirage's slogan lets one size fit all. You can pick your fantasy sin-of-choice, one you wouldn't want neighbors back home to know about. It might even rival the renowned "What happens here, stays here" slogan.

The Inside Gaming column is compiled by Gaming Wire Editor Rod Smith. You can contact him by phone at (702) 338-9653, fax (702) 387-5243 or e-mail at

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