RENO, Nevada -- The consolidation that is occurring in the gaming industry is a sign of its maturity and success, an American Gaming Association executive said today.
Wally Chalmers, vice president of the AGA, also said the industry's resilience is illustrated by the fact that gross gaming revenue has eclipsed pre-Sept. 11 levels with Las Vegas leading the pack.
Chalmers kicked off the second day of the three-day Governor's Conference on Tourism as one of three gaming industry speakers this morning.
Chalmers was a late pinch-hitter for AGA President and Chief Executive Frank Fahrenkopf, who has addressed the Governor's Conference every year since the AGA was formed in 1995. Not only was it Chalmers' first appearance at the state's top tourism gathering, but it was also his first trip to Reno.
In a city that has traced its own gaming industry downturn to the explosive growth of tribal casinos in Northern California, Chalmers said the industry is strong overall.
"While consolidation is shrinking membership in the AGA, it has certainly fueled growth for our companies," he said. "This year, there were more mergers than ever before, with Harrah's buying Horseshoe and Caesars, MGM Mirage buying Mandalay, Boyd buying Coast Resorts and Penn National buying Argosy. Consolidation is common in any mature industry, so we expect that trend to continue."
Chalmers said the health of the industry also has been reflected in the new investment opportunities offered by Wynn Resorts Ltd. and Las Vegas Sands Inc.
Those two companies "have attracted significant interest, fueled by their reputation as two of the industry's premiere operators and the potential of their casino licenses in Macau," he said.
"At least in part, robust market conditions prompted the longtime privately held Las Vegas Sands to go public," Chalmers said. "Stock prices of many existing operators and manufacturers have skyrocketed as well, with MGM Mirage up 76 percent and Boyd Gaming and Penn National shares more than doubling. Other major Las Vegas operators also had record earnings in the third quarter of this year."
Chalmers said the industry's strength and reputation has placed it in a position to take leadership roles in important issues, like diversity and second-hand smoking.
"Through our Diversity Task Force, we released updated industry employment statistics for minorities and women," Chalmers said. "Our report found that commercial casinos employ a higher percentage of black executives, white and black female executives, Hispanics and women compared to other businesses in their states and nationwide."
That's important, he said, because the number of minority travelers also is increasing.
"According to a survey released earlier this year by the Travel Industry Association of America, Hispanic and Asian Americans are traveling to Las Vegas more than any other city, and gambling ranked as the top desired travel activity among 12 percent of Asian Americans and blacks. These statistics underscore the popularity of gaming among America's minority populations. With America's minority population continuing to grow, it's critical for our companies to reflect this changing customer base and our efforts on diversity help us achieve that goal."
Chalmers explained the AGA's stance on the smoking issue.
"As an industry, we are not pro-smoking or anti-smoking, but our job as a business is to keep all our customers happy -- which, of course, is a goal we all share. And, like it or not, many of our customers choose to smoke," he said.
Chalmers said the association's efforts on the issue have been focused on how to establish standards for indoor air quality and determining whether the association wants to have a committee to determine what those standards should be.
"Now that we've gathered the requisite number of petitions, the organization's full membership will vote early next year on whether or not to establish that committee," he said. "Internally, we have established a board-level subcommittee to address this issue and expect to work toward developing a set of industry best practices."
During the course of this week's event, about 600 delegates -- about average for a Northern Nevada Governor's Conference -- will hear from tourism industry leaders, Reno's airport director and several motivational speakers.
A briefing also is scheduled on "Nevada Passage," a made-for-television event planned in May that will pit teams of athletes grouped by profession in a series of outdoors adventures around the state. Organizers hope the Nevada backdrop for rock climbing, jet skiing, four-wheel driving, biking, hiking, sandboarding and kayaking will be seen by more than 2 million viewers in more than 80 television markets.