Can Casinos Keep the Bargains Going?

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Can Casinos Keep the Bargains Going?

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Jeff Kubina

Phebe Hirschel, a retired teacher, comes from Washington State each year with a group of friends for what used to be a back-to-school trip.
Hirschel: "We try to hit some of the shows, play blackjack, certain restaurants we like"
Regular visitors like Hirschel have helped keep casinos going, but the decline in business over the last couple years has been obvious.
Hirschel: "we're kind of sad when we see some of the businesses on the side streets that are closed ... even more reason for us to come here and support businesses we do go to."
The most recent numbers show Reno casinos aren't slipping as fast as the rest of the state anymore, but when you look at how far we've fallen, things still look pretty grim. That's according to Bill Eadington, a UNR economics professor who researches gambling.
Eadington: "The continuing weak numbers in Northern Nevada are just a reflection of the combination of the sluggish economy and competition from tribal casinos in California, as well as the fact that we've had nearly a decade of decline."
Given the length and seriousness of the downturn, some casinos are offering bargain basement deals. Eadington says that may not be a profitable strategy.
Eadington: "It's what economists would refer to as classic cutthroat competition environment because we have excess capacity for hotel rooms and because casinos use food as a loss leader to bring customers in. It's difficult to see where it's going to bottom out. It's going to be difficult for the industry to even sustain its current level of economic activity."
David Farahi, executive director of gaming operations for the Atlantis, said it is tempting to slash rates and increase giveaways. But he said he doesn't want to rely on that because it's not a sustainable business practice.
Farahi: "we still have a lot of promotions, have always had, a lot of competitors have promotions that aren't profitable for them and that's not something we're willing to do"
He sees the future of tourism tied to the experience customers get when they come here.
Farahi: "People don't have as much money as 07, so when they come in they don't spend as much money but we still see them visiting us.
Things may be leveling off in Northern Nevada, but whether the numbers will ever go back up remains to be seen.