Thursday, January 30, 2003
Copyright © Las Vegas Review-Journal

Competition cuts into LV betting

Although Super Bowl take up, woes exist

Fans watch the Super Bowl on TV Sunday in the Imperial Palace sports book. Nevada bettors wagered a combined $71.7 million on this year's game. Photo by Craig L. Moran. Jill Steigerwald, left, holds up a sign Friday to greet guests of The Mirage with fellow Mirage employees Esther Pulido, center, and Nadine Catalano at McCarran International Airport. Photo by John Locher.

Increased popularity of tribal casinos, Internet sports betting and a struggling U.S. economy dampened business at Nevada's sports books over Super Bowl weekend, industry sources said this week.

On the surface, Sunday's Super Bowl was a winner for the 153 licensed betting outlets that accepted wagers associated with the Tampa Bay Buccaneers 48-21 defeat of the Oakland Raiders in San Diego.

Nevada bettors wagered a combined $71.7 million on this year's game, up slightly from last year's handle of $71.5 million. In addition, Tampa Bay's upset of Oakland, a so-called "public team" because of its popularity among bettors, helped casino sports books to boost their combined Super Bowl winnings to more than $5.2 million, up significantly from last year's $2.3 million.

Still, this year's Super Bowl also exposed a number of potential problems facing the state's gaming industry, most notably increased competition from Indian gaming and Internet-based sports wagering services.

John Mulkey, a Bear, Stearns & Co. analyst, said Indian casinos near San Diego lured many gamblers last weekend who in the past might have traveled to Las Vegas for game-related activities.

"Whether (Indian casinos) are offering tickets and then taking people back to their casinos to gamble, or just to make headway on the marketing front with some of the local gamblers in California, I think the San Diego location actually hurt Las Vegas," Mulkey said.

The Barona Valley Ranch Resort and Casino, which is about 25 miles outside of San Diego, used the Super Bowl to increase its profile among gamblers. It gave 200 game tickets to its top gamblers and their guests and hosted another 750 fans for an on-site Super Bowl viewing, said Nick Dillon, executive director of casino operations.

"This was really the first event where we had the opportunity to show off our new resort," said Dillon, whose property recently opened its new 397-room hotel.

Barona's customers could not place bets on the game because sports books are illegal outside Nevada, but Dillon said that obstacle didn't deter many gamblers.

"People can go to one of their local casinos, whether it be an Indian casino, riverboat or whatever (for slots and table gaming), and then bet the Super Bowl on the Internet," Dillon said.

Actual numbers on Internet-based Super Bowl action are unavailable. However, an informal poll conducted by St. Charles, Mo.,-based Internet gaming consulting firm The River City Group said three of the industry's top five companies this week reported increased action compared with last year's Super Bowl.

"One company said it exceeded its goal for first-time users by more than 70 percent," said Kevin Smith, a researcher with The River City Group. "More and more people are turning to Internet gaming."

Bettors' increased use of offshore sports books no doubt reduced the handle at Nevada's sports books, said Frank Streshley, senior researcher for the Gaming Control Board.

"Obviously, six or seven years ago you didn't have that competition to our books," Streshley said.

Added Mulkey: "In this day and age, it's not bad to be flat (on total handle) considering all of the other venues where you can bet on the game."

Deutsche Banc casino industry analyst Andrew Zarnett also traced the small increase in Super Bowl betting to larger economic issues.

"The (Dow Jones industrial average) has gone from 11,000 to 8,000 and the Nasdaq has done much the same. And unemployment is up," Zarnett said Tuesday. "The 2003 Super Bowl, in terms of the wagering, could be seen as pretty good. At least it was up, and given conditions that ... is a good trend."

Gaming Wire Editor Rod Smith contributed to this report.