Nevada has been trying to diversify its economy for years. When you’re so dependent upon one industry, as Nevada is on gaming, you’re gambling with your future, and state officials have understood that reality for quite some time.
Always a sparsely populated state, Nevada is also a large state with huge tracts of empty land, even today. Reno was the state’s biggest city for many years, even after gambling was legalized. In this issue of GGB, you’ll read about the Carano family and how they sprung from Reno, along with many other legends of gaming, including Bill Harrah, and now have coalesced into the modern Caesars Entertainment. But Reno didn’t keep the crown of Nevada’s most important city for long. Las Vegas has held that title for decades, and therein lies the conundrum.
As Reno receded as the capital of gaming in the state, it was forced to diversify. Native American casinos in California all but cut off traffic from Reno’s Northern California market, so the city retooled. Today, it’s home to Elon Musk’s Gigafactory, which produces batteries for Teslas. Other technology companies followed suit. Today, gaming is only an ancillary business in a booming Reno.
Las Vegas, meanwhile, is the entertainment capital of the world. Efforts to diversify the Clark County economy have often been halfhearted and more complicated than in Reno. Any diversification would have to go hand in hand with the tourism economy that dominates Vegas. A recent effort by former Governor Brian Sandoval to bring a Faraday electric car factory to North Las Vegas fizzled, and the tech that’s now so important in Reno hasn’t made inroads in Vegas.
In fact, the state and casino companies doubled down on tourism with a $1 billion expansion to the Las Vegas Convention Center, construction of a $1.9 billion stadium for the Las Vegas Raiders of the NFL, and a million-square-foot convention center, the Forum, behind the Linq, built by Caesars. They all seemed like sound investments and a way to continue the growth of Las Vegas.
Until Covid-19 hit.
The stark emptiness of the Strip in Vegas during the shutdown was a wake-up call for the state. Even with Reno’s diversification, Nevada is still heavily dependent on gaming taxes. And with no visitors, no planes and no hope, Vegas is a somewhat desperate place. Even after reopening, Strip properties are still struggling. To lure visitors, many casinos have lowered room rates, but at the same time have appeared to lower the standards of the people who arrive. There has been violence and dissent on the Strip as a result.
Las Vegas is unique as a gaming destination. For many years, that was enviable. States and jurisdictions legalized gaming in hopes of becoming just a little bit like Vegas. Now, Vegas looks very unlike a recovering city. It smacks of desperation and despair. Visitors who do come back once may not be back again, at least until some semblance of normalcy returns. Whenever that might be.
But Las Vegas has been here before—maybe not as deep in the hole as it is now, but it’s climbed out of lots of holes in the past. Las Vegas is the master of reinvention. When Atlantic City legalized gaming in 1978, many people wrote off Las Vegas, including people living and working in Vegas at that time. That sentiment has returned again with Covid.
So the investments Las Vegas made in tourism infrastructure will be awaiting the return of visitors. Allegiant Stadium will open more slowly than expected, but Garth Brooks will undoubtedly rock the house when he plays his rescheduled concert in 2021. The technology built into the expansion of the convention center and Caesars’ Forum may be more important than the buildings themselves if shows come back with live/virtual format. When the meetings come back, entertainment will also come back, filling those massive theaters that host “residencies” of some of the world’s biggest stars.
And don’t forget Resorts World, scheduled to open in 2021. Nothing makes a Vegas vacationer salivate more than a new spectacular casino resort.
So don’t write off Vegas quite yet. There’s still a lot to like about that shining city in the desert, and as a Vegas transplant, I can tell you there’s a commitment to making this city great again.