November 14, 2010 - 12:00 am
In the rubble left behind after the costliest and, arguably, the most contentious midterm election in U.S. history, leaders of businesses large and small throughout the country are left wondering: Will the outcome of the electoral battle truly have a positive influence on the sluggish economy? Will it make a measurable difference to my bottom line?
Those questions are especially pressing among gaming companies here in Las Vegas, where the unemployment rate hovers near 15 percent and the city’s casinos have yet to witness strong, consistent gains since the recession ravaged the local economy.
Certainly, the election of Sen. Harry Reid to a fifth term spells good news for the gaming industry at-large, as well as for Las Vegas and its casinos.
In this era of economic uncertainty and political volatility, our industry faces a host of opportunities and potential challenges– from the possible legalization of Internet gambling to the ever-lurking specter of increased taxes on commercial casinos. Sen. Reid understands the value of the gaming industry — both to Las Vegas and to the hundreds of other casino jurisdictions nationwide. And, as evidenced by the now well-known story of his efforts to preserve CityCenter and the job opportunities it provided, he can be relied upon to protect gaming when its interests are threatened. Our industry is well-served with Sen. Reid in a position of authority in Washington.
The election of Brian Sandoval to the Nevada governorship is likewise promising. An alumnus of the Nevada Gaming Commission, his knowledge of our industry runs deep. In addition to facing a steep unemployment rate, Gov.-elect Sandoval must contend with a troubling budget deficit when he takes office in January. As he works to address these and other issues, he can rest assured that he will find a committed partner in the gaming industry.
Election Day brought our industry encouraging news from other corners of the country, as well. The passage of legislative measures in Iowa, Maine, Maryland and Missouri is likely to translate into valuable business opportunities for many gaming equipment manufacturers, including Nevada-based companies. But, perhaps more importantly, these results indicate that a favorable impression of our industry has become commonplace. More and more Americans now realize that casinos are collaborative community partners that provide good-paying jobs and critical tax revenue.
Despite these positive developments, the midterm elections serve as a reminder that the gaming industry has much work to do in Washington. Soon, there will be a collection of unfamiliar faces on Capitol Hill, and we currently know very little about some members of the new guard– including their positions on various issues that directly and indirectly affect our industry.
In addition, the chairmanships of several key committees in both houses are expected to be hotly contested. Any substantive power shift is likely to have a very real impact on the way our industry does business. We must redouble our efforts to educate our nation’s leaders about the benefits of commercial gaming to millions of working families, and to ensure that our industry has a seat at the table when crucial policy decisions are weighed.
After spending more than 40 years in politics, it has been my experience that legislators’ actions can — and very often do — significantly affect the trajectory of the economy and, therefore, businesses like ours. But, ultimately, while policy can partially influence Americans’ spending activities, it cannot create consumer demand.
Most economic observers agree that, after such a deep and persistent downturn, consumers will be slow to rebuild their wealth and begin spending as they once did. And, until spending fully rebounds, the gaming industry — and, therefore, Nevada — will continue to struggle.
This issue — identifying ways that casinos can operate more efficiently in the "new normal" of the U.S. economy — is the primary focus of the 10th anniversary of Global Gaming Expo, taking place this week in Las Vegas. In addition to discussing the potential impact of the midterm elections, gaming professionals from around the globe will come together to unveil new products, share best practices and develop ideas to stimulate business.
As always, I have tremendous faith in our industry’s ability to adapt — to both the newly transformed political landscape and to forthcoming bumps along the road to economic recovery. Our industry and its flagship market have proved time and again that they are innovative and agile. While the past 10 years have included their share of challenges, I remain optimistic about what the future holds for the gaming industry, the state of Nevada and the city of Las Vegas.
Frank Fahrenkopf is president and CEO of the American Gaming Association.