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Thursday, March 10, 2011
Las Vegas casinos: Lockout would hurt

Associated Press

LAS VEGAS -- Las Vegas casinos, fighting hard to rebound from a dreadful stretch for tourism, face a new threat if NFL players and owners can't agree on a new contract.

And the longer the sides disagree, the worse things might get for the gambling mecca.

"I can't see us losing a whole NFL season," said Lee Amaitis, chief executive of Cantor Gaming, a company that operates sports books in four Las Vegas casinos. But if it happens, "it won't be good."

"If this town doesn't have the Super Bowl, it'll be a disaster," he said.

The NFL is king among sports bettors, whose influence in casinos goes far beyond actual wagering on games.

The main tourism agency that promotes Las Vegas estimates this year's Super Bowl alone brought 275,000 visitors to Sin City, generating $85.6 million in revenue beyond gambling.

In 2010, 267,000 people came and spent $83.1 million on hotel rooms, restaurants and other entertainment besides gambling, the Las Vegas Convention and Visitors Authority said.

Those figures dwarf the $724,000 casinos won on $87.5 million gambled statewide on the Green Bay Packers' win over the Pittsburgh Steelers last month.

"You can back it up all the way to the cab drivers, to the airport, to other venues across the country," said Jay Kornegay, executive director for the race and sports book at the Las Vegas Hilton. "It's well beyond the sports books of Nevada, and that's why I believe there's going to be a lot of pressure on them to settle this thing."

Players and owners currently have until Friday to settle on a collective bargaining agreement, extend the current CBA again, or move toward a work stoppage could that ultimately could threaten the season. The sides are discussing a range of issues, but the labor dispute mainly centers on how the NFL and players should split more than $9 billion in annual revenue.

A lot of money is on the line in Las Vegas as well.

Sports books generally try to generate even wagering on each side of a bet, charging a small fee to customers to play.

The largest 256 casinos in Nevada made $138.7 million in revenue from sports gambling between July 2009 and last June, according to state gambling regulators. But because of the way sports betting operates, with books taking that small fee, the revenue is only about 5 percent of the amount actually gambled by bettors.

And sports betting overall made up 1.4 percent of the $9.9 billion in gambling revenue in Nevada's largest casinos during the fiscal year.

Bettors in the state legally wager about $2.5 billion annually on sports, and about 30 percent of those bets, $750 million, are gambled on the NFL, Kornegay said. Experts estimate much more is wagered on the NFL illegally and outside the United States.

"I've been asked, 'What's your backup plan?' " Kornegay said. "I'm all ears. You know, you just don't replace the NFL."

Kornegay and Amaitis said books won't lose all of the revenue from NFL bettors, because some will shift to other sports.

But "the fan bettor of the NFL -- they'll disappear," Amaitis said.

Steve Fezzik, a professional gambler who says he left a job years ago as an insurance company actuary for a comparable six-figure living, said he would wager less if the NFL shortened or canceled its season.

"I'd have to because there'd be fewer things to bet on," said Fezzik, who runs a forum for sports gamblers at LVASports.com. "It hurts me a lot because the NFL is my bread-and-butter."

Fezzik said no NFL games would make college football betting more difficult because sports books would have more time to set tougher betting lines.

But Fezzik, a prognosticator who won more than $400,000 by winning the Hilton's annual NFL handicapping contest two years in a row, said the loss for casinos would be much greater than for bettors.

"I'll put a prediction -- if there's no NFL for the entire year, Vegas will lose 7 percent of its [overall] revenue for the fourth quarter. I would put the number that high," he said. "The ancillary impact will be tremendous."

Kornegay said that without an NFL season, the Hilton is unlikely to hold its handicapping contest, which attracts hundreds of entrants each year with a $1,500 buy-in. He's already put disclaimers on individual Super Bowl bets -- they'll be in play so long as the game is held.

"We're concerned about it, but I'm not losing sleep over it until we get to August. Then, I might be up all night," Kornegay said.

"We have some leeway time, and we're just thankful that [players and owners are] at the table right now, and they have some time to work this out before it affects us."