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Favor Exchanges May Spell Victory in Nevada Senate Race

Posted on October 30th, 2010

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The casino and gaming industry is sitting on pins and needles as they brae themselves for the coming elections on November 2. Should Sharron Angle, the Republican candidate for the Nevada senate, lose, this may mean happy times for the industry. In the past, Sen. Harry Reid has been extremely supportive of the gambling industry. An Angle win means a loss for the Democratic Party and a probable lack of Senate support for the industry that has been the lifeblood of the state. The casino industry is one of the most dominant forces in Nevada. The industry accounts for 17% of employment available in the entire state. It is also the source of 1/3 of all state tax revenue. This has caused the state to be focused on a candidate that would support gambling activities. Thus, while Democrats around the country are at odds with business groups, the gambling industry is showering support for Sen. Reid.

Senator Reid has been in a love-hate relationship with the business community in general. As Senate majority leader, he has thrown support for several measures that businesses didn’t find helpful. Some casino executives have even publicly criticized some of his choices. An example of this was his support for the health-care law that was passed earlier this year. Another issue Reid backed up is allowing tax cuts for the wealthy, which were enacted under President George W. Bush, to be terminated. Despite his past, Reid has still maintained the endorsement of majority of casino companies. His campaign has also been the recipient of a windfall of campaign cash not just from the industry, but from casino employees as well.

On the other hand, Angle has been a favored candidate of tea-party activists. Currently engaged in a toss-up race with Reid, she has adapted a more traditional platform. Her platform includes favoring decreased taxes, a leaning towards traditional businesses, a smaller bureaucracy and less regulation. Despite those seemingly pro-business stands, she has received less than enthusiastic support from businesses and definitely less campaign money from the casino industry than Reid. To add insult to injury, a number of the major industry executives have been actively campaigning against her.

The main reason for the lack of support for Angle has been that Reid has made the conscious effort of maintaining ties with the gambling industry over the years he was in position. The business community, for its part, has been adamant in keeping contacts in high places. Jan Jones, a senior vice president for communications at Harrah’s Entertainment Inc., articulated this by saying, “Having the third-most-powerful man in America from Nevada is certainly key to our influence.” Reid, for his part, has made sure that his support for the casino industry was made clear when he gave his backing for a major casino resort project in Las Vegas. The City Center, estimated to cost $8.7 billion, is a glass and steel complex located in the Las Vegas strip. It features high-end facilities such as hotels, condos, spas, shops and a casino floor. 9,700 employees have jobs in the City Center, all of them state residents and voters, spelling a huge difference for Reid.

The City Center was opened in December of 2009 with much fanfare. Behind the glitter was a close call, as the project was a partnership between MGM Resorts International and Dubai World. The two companies happened to collect a huge sum of debt on the onset of the U.S. financial crisis in 2008. The project was nearly trashed after the partners fell apart. Jim Murren, the chief executive of MGM Mirage had to ask Sen. Reid for help. Murren gave the senator a list of bankers to contact, including J.P. Morgan Chase & Co. and Bank of America Corp., in order to ease MGM’s situation. Mr. Murren said “I would get calls from banks within 24 hours saying, ‘The Senate majority leader is calling my boss’s boss’s boss. What can we do?’” MGM got the concessions and the project went ahead.