The last vestiges of the 1970s’ casino industry leaving Reno

The last vestiges of the 1970s’ casino industry leaving Reno

  • Ken Adams
January 23, 2022 4:28 PM

Several articles have appeared in the Reno Gazette Journal this month. One reported that the Bonanza Inn is for sale and will likely be torn down. Another described a new Carano-family restaurant opening at Harrah’s Lake Tahoe. A third announced an auction for the fixtures and decorations of the Little Nugget in downtown Reno. Finally, an article indicated that Clear Capital, a real estate technology company, is taking up residence in the former Harrah’s Reno, now remodeled as an office, retail and residential complex.

The articles speak to the changing gaming environment in Reno. It has been well documented that the Reno casino industry has undergone dramatic changes in the last 30 years. The National Indian Gaming Regulatory Act passed in 1988; a year later, South Dakota, Iowa, and Illinois legalized casinos; in 1990-1993, Colorado, Missouri, Louisiana, Mississippi, and Indiana joined the industry. Over the decade between 1989 and 1999, Native tribes in Oregon, Washington, Montana, Idaho, Arizona, New Mexico, and category-killer California, all of Reno’s feeder markets, opened casinos. Add to the tribal and commercial casinos the introduction of multi-state lotteries, Powerball (1992) and Mega Millions (1996). As a result of all the added competition, Reno has been under a 30-year siege that would put the Ottoman siege of Byzantium to shame.

For 30 years, casinos closing in the Reno area have been commonplace. The most vulnerable were those like the Bonanza Inn and the Little Nugget. Their business models were suited to 1970, not 2020, and they were undercapitalized, unable to update and expand to keep up with trends and competition. The Bonanza was just a small hotel designed to take the overflow from the major hotels in the city; it was meant to have a few slot machines to catch the loose change of its guests. That model worked fine in 1960 or 1970, but by the time the 21st century arrived, it was an unsustainable model. The Little Nugget was even further out of sync with the times. It was a small slot house on Virginia Street. The main thoroughfare through downtown Reno was once just behind downtown Las Vegas and the famous Strip for gaming revenue. But after just a decade of Indian gaming, it looked like a street in Virginia City after mining and the miners had packed up and left — a shadow of its former self with nothing but the boarded-up storefronts to bear witness to a glorious past.

Harrah’s did not fit that model, but it too was seriously outdated. At its peak in the Bill Harrah era, Harrah’s was the crown jewel of the Reno gaming industry. However, as the parent companies that owned Harrah’s in the wake of Bill Harrah’s death in 1978 expanded, they focused their attention, emphasis, and money on other jurisdictions; like any good corporation, Harrah’s put its money where it got the best return. That was not Reno and every year, Harrah’s Reno got further and further behind the curve.

The story about the Carano restaurant at Lake Tahoe illustrates the future much more than the past. The Carano family and its casino, the Eldorado, were also part of the 1970s’ Virginia Street landscape. The property opened in 1973 with 278 rooms. Unlike the other casinos on Virginia Street, however, the Eldorado reinvested and expanded the casino continually over the years. And when Indian gaming appeared on the horizon, the Carano family began to diversify outside of the downtown corridor and outside of Nevada. By now, everyone knows the Eldorado story. Through a series of purchases, mergers, and acquisitions, the former Eldorado, a privately held, family corporation, has become the public Caesar Entertainment, the largest casino operator in the United States. Now, after gobbling up as much of the gaming industry as it could digest, the company is pushing into sports betting in a major way.

The Eldorado was not the only company that successfully navigated the changing landscape in Reno. Two others have as well.

Monarch and Peppermill have been very successful. They had a serious advantage over the downtown Reno properties: land, with its attendant resident population base. The land allowed the Atlantis and Peppermill to offer unlimited, free, surface parking. It also meant the properties could expand and adapt to changing trends in the casino industry. And the resident population meant the casinos did not depend solely on tourism. For most of the history of casino gaming in Reno, the city relied heavily on tourism. California, Oregon, and Washington provided a constant flow of tourists, uninterrupted by weather or the economy; not even a recession stopped people from those states coming to Virginia Street. Nothing until Indian gaming arrived; in its wake, Reno was left struggling to find a new identity.

And then along came Tesla.

Just as the Harrah’s Corporation did, the city of Reno has moved on. Warehousing, Tesla, and other high-technology companies came to the rescue. The city now has a growing and vibrant economy. Granted, there is not enough housing, employees for the retail sector are hard to find, and the cost of living is skyrocketing. As difficult as the situation may be, it is better than the 1990s when casino revenue was shrinking, as were jobs and hope. Reno has hope now, problems for sure, but hope. A one-industry town is great when that industry is growing and healthy. It is a disaster when that industry dies. Finding a replacement is never easy. Just ask Detroit. Reno was just plain lucky.