Why Not More Casinos?

This is a response to this comment from Mike’s blog:

Posted by: Bugsy - 9/30/2008 4:08:52 PM
Im reading this and I feel both very excited and very upset. I am happy that the hotel is getting the complete makeover it desperatly needs, but I am also very upset that they are closing the casino part of the hotel. Why is the redevelopement agency trying to steer away from gaming downtown. Gaming is the life line of the city. Always have, always will. When the Indian casinos started popping up in California, Reno almost became a ghost town. That shows that this city is a gaming tourist city. Most people coming to visit, come to gamble. Every city in the United states have hotels, but only a few, including Reno, have hotels with casinos. The people who bought condos downtown, like myself, knew that they were going to be living within close proximaty of the casinos when the bought them. Gaming = Jobs. Mr Leal, You have established yourself a great and respectiful business leader here in downtown and I would "bet" that you have a very favorable appoval rating with the downtown residental and business owners (including myself). Don't tarnish your image by eliminating the casino jobs downtown, especially during these economic times.

The erstwhile reader will know that this blog occasionally dabbles in economics.  Economics is the study of many things; two of them are promise and permission.  It seems that in order to secure the latter, one must be willing and able to follow through on the former.  The promise is made by the consumer to pay, and the permission is received from the producer to provide.  But the permission the producer receives from the consumer – to extract the resource of potential from them, makes it a two way street.

Why is Reno a city at all?  It’s not for the casinos.  You may recall that Reno began life as a river crossing.  The Truckee’s gorge is not particularly deep, but it is certainly impassable by a wagon train.  When the bridge that is now the Virginia Street bridge was built over the river, it was built ultimately for economic advantage.  The thing standing between what the people wanted and them getting it, in this case, safe and easy passage over that river, was the man on one side of the bridge collecting a toll the travelers needed to pay to cross it.

That could only last so long.  When the railroad pushed through, what made Reno what it would become next was that infrastructure – that bridge – which enabled the free flow of goods and services from the mining camps of Virginia City to the outside world.  The value generated from that led to the creation of the V&T, which expedited the aforementioned process even further.  Supplementing the direct logistical value to the mining trade was the agriculture, which itself took advantage of the infrastructure built to help the colonization and the mineral extraction, respectively.

Reno – regional center of commerce and logistics, cared little about the shape and form of its moneymaking activities.  The attraction lay in something deeper – in the intrinsic value of the location.

When the mining petered out and finally the Great Depression brought the nation to its knees, legalizing the long existent underground activity of gambling was secondary, a side benefit really, to what Reno was already doing to build up its reputation.  The divorce trade, begun long before, was established with the goal of keeping outsiders coming to a region the perceived resource value of which was virtually zero by that point.

Now, a casino is a good business.  But economics is about things other than promise and permission.  It is about the efficient management of resources and potential.  The permission sought by all involved in this process is the permission to live a life unencumbered by barriers to getting the things we all need – shelter, food, clothing; and in a good economy, the permission to live a life where those three basic things are taken care of for everyone involved in the promise and permission game such that potential is also granted permission in the form of some sort of equity.

One thing a casino is certainly not about, at least to the consumer, is the efficient management of resources and potential.  You’ll note that I have thus far failed to mention money.  Money is an abstraction for all the factors of promise, permission, resource, and potential, a mutually agreed upon mechanism, a common language which we all use to know where we stand with regards to all four.

A business based around people squandering their extra potential granted to them in this game, and receiving a limitless bounty of expensive things just for participating, such as all you can eat prime rib for $7.99, is certainly not thinking about the efficient management of resource and potential from the consumer’s perspective.  It is instead based upon the suspension of the commonly agreed upon rules and a considerable amount of mutual taking advantage.

This is a liar’s game and unfortunately it catches up to the liars in the end.  Why was Reno shut down in the mid-90s?  Because the potential which had been pouring into Reno – the extra potential – was being redirected by the new people who were running the game.  Being redirected in all directions away from Reno until the only thing left were skeletons of once glamorous buildings and bitter people stamping out their cigarettes on other people’s carpet.

We would all love to see the glamorous days of Reno’s time as the gambling capital of the world return – just as I know because I have read it, that Mike would like to see the V&T running back down Holcomb Ave and I would like to see it running back through the hills of my own native Washoe Valley.  But who would ride the thing?  The tourists?

What is the value of a place when the only people who are expected to be interested in and use the interesting things built there are people who don’t even live there?

Comments

[Bugsy]

AHHHH, huh? I didn't understand what you were trying to say. If your trying to say that casino's lose money, how do you explain las vegas and the billion dollar casinos that are paid off in a few years do to the revenue. And if you want to think locally, how do you explain the million dollar expansion of the peppermill and the atlantis. Casinos can continue to thrive in reno and the downtown area. We all have been saying is that the downtown casinos need to be cleaner and updated and the money and clientel will come and spend their money. why can't the fitzgeralds update and modernize the casino like the "Boutique" style of the new hotel.

[Ken]

Hey Bugsy I was hoping you'd swing by, I meant to put a link over at dtm but never got around to it.

Casinos are a fine business that make plenty of money. I'm not arguing that point. Actually I've argued here several times that there is room in Reno for growth. And I agree with you that the existing casinos downtown need to update their properties to make them more appealing to today's customer.

Also I am not a betting man, but if I were, my money would be on the possibility that the new Fitz will have a casino. I can't imagine it not. Plus the fact that Leal also owns the golden phoenix virginia street casino as well. But like he did to build the montage, he's going to have to put those buildings (remember he owns the whole fitz block north of the alley) under some serious heavy construction, and it would be inadvisable to keep a casino open during a renovation like that. I actually think it sucks the closure is happening before the holiday season and not after new year's but as has been said before, at least the people do have plenty of notice, it's not like when the mapes closed.

But Reno isn't a city just because of casinos and frankly it should be looking to diversify even more. The promise of easy money is the poison in the well that has been keeping Reno down for too long. Too little education required to work in a casino has bred a climate of anti-intellectualism that is strange for a place that would be a wonderful college town without that attitude.

[Bugsy]

I agree with you Ken. I think Reno can expand and redevelope with out having to shut down the casinos. I also agree that UNR will help reno get more noticed, especially with the recent national exposure of the basketball program.. Ken, I realy like your blog site. I just hope you can post articles and stories more often. Keep up the good work.

[Kyle Weiss]

Most poignant statement:

"But Reno isn't a city just because of casinos and frankly it should be looking to diversify even more. The promise of easy money is the poison in the well that has been keeping Reno down for too long. Too little education required to work in a casino has bred a climate of anti-intellectualism that is strange for a place that would be a wonderful college town without that attitude."

You rock, Ken.

KW

[Ken]

Why thank you, Kyle!

[Kevin]

I live in CT and we have had great success with our casino's. It has really added to an area of CT that was lacking in local economy and tourism. www.mycitystop.com is a website design to get people in urban area out to take advantage of local hot spots like casinos restaurants and bars.