(page 2 of 6)
“We’re getting to understand the junkets and how the VIP rooms operate,” Burnett said. “We haven’t decided whether that’s offensive to the way we operate.”
But former Nevada officials and industry experts said that the Control Board’s close ties to the industry, and Macau’s rapid emergence as the key driver of growth for the big gaming companies, suggest that oversight is unlikely to strengthen.
“The trend is the other way,” said Nelson Rose, a Whittier Law School professor and frequent expert witness on gambling rules. “To some extent the Nevada regulators are just crossing their fingers.”
IS NEVADA EVEN NECESSARY?
Macau now provides more profit to Sands and Wynn than Las Vegas does; if forced to choose between Nevada and Asia, they might well decide to leave Nevada behind, as MGM chose to abandon Atlantic City. It did that rather than fight New Jersey investigators’ findings that its joint venture partner, Macau businesswoman Pansy Ho, had unsuitable links to triads. Nevada approved the venture after ruling that MGM had ultimate control of it.
“The way (the casinos) have been structured, they can hive off the companies” that operate in Asia, said former Control Board chairman Mike Rumbolz, who later became a casino executive at the Trump Organization and elsewhere. “Years ago companies were very concerned to get the blessings of Nevada regulators. Today I don’t think you’d see that kind of concern.”
Sands, Wynn and MGM have already put their Macau operations into distinct subsidiaries, which could eventually be spun off entirely. They declined to speculate on what they might do in the future beyond saying they want to be everywhere. “We work closely with our regulators in all of our markets,” said Sands spokesman Ron Reese.
Peter Bernhard, chairman of the Nevada Gaming Commission, said that “the value of a Nevada license is still going to be critical” and that the casinos “are going to make sure they are going to comply with all of our requirements.” The Commission weighs regulation changes and acts as a judge in hearing complaints and licensing recommendations brought to it by the Control Board. Burnett likewise said that Nevada would remain crucial.
But since 2005, MGM’s revenue has more than doubled, Wynn’s has tripled, and Sands’ more than quadrupled, thanks to the Macau boom. Macau is on track to produce $62 billion in gambling revenue overall by 2015, according to PricewaterhouseCoopers, while Nevada’s contribution will remain flat at $13 billion. Singapore and other countries are also expanding their casino licensing rapidly, further eroding Nevada’s once-central role.