Would a bailout for major companies help save Las Vegas casino jobs?
That’s the idea some people are throwing around. After the government recently approved a large bailout for the country’s financial industry, and is in talks to bailout the big automotive companies, some people are wondering why more attention isn’t being turned to Las Vegas. Such a move could help save the faltering gambling industry, which has only continued to decline amid the current economic slowdown, as well as save jobs, according to an article by the Los Angeles Times.
“After all … aren’t union jobs at stake?” the article notes. “And doesn’t the entire Las Vegas (and Nevada) economy depend on the resorts as surely as Detroit does the auto industry? The ripple effect of the casinos’ financial problems could be staggering. They already are if you are one of the many locals among the layoffs done by every resort company in town.”
Because of the current credit crisis, many companies are laying off employees and many projects are being put on the back burner. The Stardust recently closed, causing many employees to lose their jobs. Many new jobs were created during the construction of Echelon Place, which was to replace the Stardust, but building of that project has been suspended. The New Frontier also was recently taken down and is looking for money to build a hotel on the empty lot. Also, MGM Mirage is currently trying to get funding for the final phase of its six-tower City Center development.
“Now, because of credit markets, it will be years before the existing hulk of metal is transformed into a resort able to employ locals,” the article adds. “Unless, that is, there is a federal gift/loan to the owners to complete construction on Echelon Place. That could fix the issue for all, and create solid construction jobs leading to solid resort jobs - all union.”
Many resorts have seen an 80 percent to 90 percent drop in their stock value during the past year. Las Vegas Sands, which owns the Venetian and Palazzo, recently fixed its financial situation, but only because the company’s owner took out a large loan.
“Beyond the fact that we are a gambling-based town, are we any less worthy of a federal bailout?” the article notes. “The resorts made all the same mistakes that other industries being bailed out made. If in the roaring times of two years ago our casinos overbuilt, spent too much, went private by taking on too much debt, well, why should they be the only ones held accountable?
“The government could solve Vegas’ problems with just a few billion,” the article continues. “We won’t need $25 billion like Detroit. And problems for the Strip could be as devastating for Las Vegas as Wall Street problems for New York or auto industry problems for Detroit. We are a one-industry city with no backup plan.”
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3 Responses
Las Vegas Casino Jobs Cut with Sands
18|Dec|2008 1[…] Sands, like many other casino companies, is facing billions of dollars in debt in debt from expansion plans. The company’s stock also has fallen, and CEO Sheldon Adelson contributed almost $1 billion of his personal cash to keep the company afloat. Las Vegas as a whole has seen a drastic decrease in its consumer base as revenues have continued to decline every month since the end of 2007. Most recently, Nevada gambling regulators said gambling revenue on the Las Vegas Strip dropped to $475 million during October, a 26 percent loss compared to last year. […]
Las Vegas Casino Jobs Declining
02|Jan|2009 2[…] Nevada as a whole has been struggling to close a deficit of more than $1 billion in the 2009 budget and budget projections for the next two years don’t look promising. Because of all the monetary problems, many projects are being put on hold. Construction on Boyd Gaming’s $4.8 billion Echelon resort was stopped last August and construction isn’t expected to resume until 2010. MGM Mirage sold its Treasure Island facility to Phil Ruffin for $775 million. The company is hoping to finish construction on its $9.1 billion CityCenter. […]
bailout 2.0 « ginsudo
23|Feb|2009 3[…] Would this work? Is it too complicated, too stupid, too difficult? Look, this is just half hour’s worth of musing, but I believe that any objection you can raise can be fixed with further work to at least to this standard: it’s not worse than the government bailouts going into effect now, and it’s certainly not worse than some being asked for. Something along these lines is in the spirit of what Silicon Valley can do, and I’d be thrilled to see more serious efforts to design something that fits with the ethos of our region. […]
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