Rolling the Dice: There May Be Risks When Hospitality Companies Put Their Brand on Gambling
By William A. Brewer III Managing Partner, Brewer, Attorneys & Counselors | October 28, 2008
According to the Greek philosopher Heraclitus, "The only constant is change." The leisure industry, not unlike other industries, is in a state of constant transition. With change comes risk; the risk associated with entering a new business, and the risk of lost opportunity. As recently as 1978, Nevada was the only state to offer casino gambling.
However, significant developments have taken place in the latter half of the 1990's, as the number of states permitting casino gambling increased from one, to 27 by the new millennium. Casinos can now be found on riverboats and in resort locations, perhaps with the most explosive growth occurring on Indian reservations. Not surprisingly, with the expansion of casinos and the popularity of commercial gaming, Nevada was one of the fastest growing states during the second half of the 20th century.
High Stakes: Gambling Means Big Business
Gambling is indeed a growth industry. According to the American Gaming Association, over the course of the last ten years from 1995-2005, total commercial casino revenues nearly doubled from $16.0 billion in 1995, to $30.3 billion in 2005. Additionally, total gaming revenues increased by approximately 74 percent for the period 1995-2004, from $45.1 billion to $78.6 billion.
Just after the state of Nevada passed the Corporate Gaming Act in 1969 to permit publicly traded companies to have gambling licenses, some of the major hotel brands entered the Casino Industry. Over the years, as other states have approved gambling, these companies have expanded their efforts in this market.
The rapid expansion and popularity of gambling can be traced to several major events: