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When Strip titans clash

CARSON CITY — In the clash of the Strip titans, it looks like MGM Resorts International is beating rival Caesars Entertainment.

Ground zero in the war is the empty piece of property behind the Imperial Palace, where Caesars executives envision a sports arena financed with a 0.9 percent add-on sales tax levied on businesses in an "arena district" within a three-mile radius of the site.

MGM Resorts International, which has a number of its own arenas, argues taxpayers — even if most are tourists — should not subsidize a competing sports arena, especially in a recession.

After Caesars executives were unable to persuade the Clark County Commission to support the arena idea, they successfully circulated an initiative petition statewide to put the matter before the Legislature. And while that initiative is still the subject of an ongoing lawsuit, the Legislature decided last week not only to reject the petition, but to contemplate a rival ballot question that could kill it and similar ideas in future.

Advantage: MGM Resorts International.

(Under Nevada law, lawmakers have 40 days to approve an initiative outright, reject it outright or reject it and declare their intention to place a competing measure alongside the original. No matter what, if the Legislature refuses to enact the measure, voters get their say at the next general election — in this case, November 2012.)

But the state Senate and Assembly went further than simply rejecting the idea. "Whereas, there are alternatives to [the initiative] that could be proposed by the Legislature that would better serve the interests of the state of Nevada; and whereas, this Legislature intends to propose a competing measure for submission to the voters on the November 2012 general election ballot," reads Senate Concurrent Resolution 4, in part.

That competing measure? A ballot question that asks voters to declare sales taxes must be uniform and equal throughout each county in Nevada. While Nye County could have a different sales tax rate than Clark County, the rate would have to be uniform within Clark.

That means no special "arena districts" with special sales tax rates — either the entire county pays the extra 0.9 percent, or nobody does. And it means the Legislature is taking direct aim at Caesars.

Big-time advantage: MGM Resorts.

(Under the law, if either initiative gets less than 50 percent of the vote, it fails. If both get more than 50 percent of the vote, the one with the highest number of votes wins.)

This story is fascinating for many reasons, not least of which is: Under normal circumstances, the Legislature would be likely to approve an initiative supported by a big casino company that had the endorsement of more than 200,000 voters. But because the issue has split the Strip, lawmakers were forced to choose sides.

There are several ways the dispute could be solved before the matter reaches the ballot. The judge hearing the lawsuit could throw it out, although that’s unlikely. It could be withdrawn, under a bill sponsored by Assembly Speaker John Oceguera and Senate Majority Leader Steven Horsford that would allow backers of an initiative to cancel it all the way up until early voting ballots are printed.

An even unlikelier scenario — if MGM Resorts International can compromise with Caesars — could end the drama. The petition could then be withdrawn, or go forward with both companies’ blessing, and relieved lawmakers could simply forgo their plans to put the alternative measure on the ballot.

And finally, the entire issue could become moot if the backers of a rival arena project on the UNLV campus start construction, leading voters to conclude that no additional arenas — or arena taxes — are necessary.

Either way, it’s proof that even a giant casino company can’t always get what it wants in Carson City. Provided, that is, another giant company stands in the way.

 

Steve Sebelius is a Review-Journal political columnist and author of the blog SlashPolitics.com. His column appears Sunday, Tuesday, Wednesday and Friday. Reach him at (702) 387-5276 or at SSebelius@reviewjournal.com.

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