Ever since Nevada legalised casino gaming in 1931, Las Vegas has far outpaced Reno in terms of evolution, growth and relevancy. In more recent years, the boom of tribal casinos in nearby northern California has sparked even stiffer competition for the Biggest Little City’s gaming market.
It has become increasingly common to see $1 billion-plus projects in Las Vegas and California, but Reno had never seen that level of investment — until recently.
Grand Sierra Resort (GSR), which was snapped up from bankruptcy in 2011 by billionaire Alex Meruelo, embarked on a multi-phase expansion project that includes a sports and entertainment arena, a new hotel tower and other amenities. Overall costs for the project fully built-out would be at least $1 billion, the first to break the 10-digit threshold in Reno’s history.
Central to the development is a key question for both Nevada and California in gaming: can sports and entertainment be the driver of casino and regional economic growth like it has for a decade in Las Vegas?
Reno far behind California, Las Vegas by revenue
Now that work is underway, GSR is hopeful the arena will become a new staple for a region that competes primarily with northern California tribal casinos but somewhat with Las Vegas as well. Arguably the biggest modern inflection point for the Reno gaming market came in 2000, when California tribes were granted exclusivity for Class III gaming in the state.
Since then, northern California became a sizable gaming market while the Biggest Little City’s industry failed to grow. Reno reported gross gaming revenue of $754 million in fiscal year 2024, compared to $834 million in fiscal year 2000, per the Nevada Gaming Control Board.
The most recent National Indian Gaming Commission data shows that California tribal casinos reported GGR of $12.1 billion in FY24, though that was statewide. That figure was easily the highest of all eight geographic regions tracked by the commission. Combined GGR for the Las Vegas region (Strip, downtown and locals), which is Reno’s other chief competitor, was also about $12 billion in FY24.
Adding to that level of competition is the fact that significant developments are in the works for both markets. Hard Rock Sacramento is undergoing its own billion-dollar expansion project, and a previously approved casino project near Santa Rosa was recently put on hold but is still on court appeal. Among projects in Las Vegas, the A’s are building a new MLB stadium on the Strip with an adjacent resort complex to be developed by Bally’s Corp.
What’s included in the GSR expansion project?
The yet-unnamed arena is the focal point of the project and will serve as the home for the University of Nevada, Reno men’s basketball team. Stakeholders are hopeful the arena can become both a draw for fans and a recruiting asset for the school as it fights to compete in the name, image and likeness era. The university is not committing any resources toward the 10,000-seat, $435 million arena project.
GSR Chief Marketing Officer Chris Abraham told iGB the idea for the grand expansion started about three years ago.
“It just became clearer as time went on that there’s a real need in our community for an arena, a real one that can house sports and entertainment and do it in a first-class way, which is, I think the message that we were very cognizant to get across,” he said. “We’re not just building an arena. We think we’re building the greatest arena on the planet at 10,000 seats.”
The first phase of the project includes the arena, an adjacent parking garage, a community ice rink and a waterfront Topgolf-style facility. A groundbreaking was held for these 30 September, with completion expected by September 2027. Construction was halted last week because of soil contamination but is expected to resume shortly without affecting overall timelines.
Hockey on the horizon?
Abraham noted that ice hockey is also an intended use for the stadium. Meruelo owned the NHL’s Arizona Coyotes franchise from 2019-2024 but ultimately dissolved the team after failing to drum up support for a new arena in Phoenix.
He did, however, maintain ownership of the Tucson Roadrunners minor league team. There has been speculation that the team could be moved to Reno to play in the GSR arena, but Abraham said it “has not yet been determined” which hockey team might play there.
After the first phase, the remaining amenities include a workforce housing building and an 800-room hotel tower. The exact timelines for those phases are unknown, but GSR estimates the entire project to take about 10 years. Abraham said the expansion will fit mostly on its existing footprint, and some adjacent land has already been purchased.
“We’ve always been blessed with an abundance of land,” Abraham said. “We have over 150 acres on the property, it’s massive. And so we have plenty of room and Mr. Meruelo has always talked about unlocking the potential of this property — not just the property itself, but all of the space we have.”
Hope is that if arena is built, growth will follow
A key question for the project is whether the mature Reno market can support such a large and ambitious investment. After all, the projected cost of the arena, which Abraham said would “probably end up being a little bit more” than $435 million, is more than half of what the city as a whole is averaging in annual gaming revenue. But from GSR’s perspective, a first-class venue can be the catalyst needed to kickstart new growth.
In addition to UNR basketball and other sporting events, the arena would immediately become the premier draw in the region for top musicians and entertainers. Its capacity of 10,000 beats out the current leading facilities like Lake Tahoe Outdoor Arena (9,300), Reno Events Center (7,000) and outdoor Nugget Event Center (8,500).
UNR’s current facility, Lawlor Events Center, actually has a higher capacity than the GSR plan (12,000) but is 42 years old, has parking limitations and no longer hosts concerts. The new arena would feature more modern systems and fan technology to account for the slightly lower seat count.
“We’ve looked at about a good dozen of the newest arenas in the country, and we feel like we’re going to take the best of all those,” Abraham said. “And when this is built and this is complete, it’ll be the nicest arena this size, we hope, in the world.”
Las Vegas has long been a hub for A-list entertainers and there is a dearth of new venues throughout California. One that could serve as a model, as Nevada Sports Net noted, is Acrisure Arena in Palm Desert. That venue has similar capacity and was designed by the same firm (Gensler). Acrisure has hosted several acts Reno typically would not draw, like Harry Styles, Olivia Rodrigo, Maroon 5 and Dave Chappelle.
Betting big on the Biggest Little City
Most of the large casino properties in Reno are at least 30 years old, with GSR among them. The property changed hands several times since opening as the MGM Grand in 1978. Prior to Meruelo’s ownership, GSR struggled to perform to its potential as the largest resort in the city by room count and casino size. It was believed to be on the brink of collapse before being sold in a $42 million fire sale.
Since taking over nearly 15 years ago, Meruelo has injected hundreds of millions into the property. Abraham said that, above all, the mogul has brought “more of an entrepreneurial spirit” to the business. The arena and overall expansion project are the embodiment of that attitude, despite the potential doubts about the market.
“As Mr. Meruelo took over and began to understand the business, it was the experiences that needed to be curated,” Abraham said. “And it’s not just putting money in, but how to put money in, where to put money in. What’s unique about us is we have many core guests. We have convention goers, we have leisure, we have business, being right by the airport. We have entertainment seekers and gamers.
“So looking at all those experiences and how they all interact and how we create a product and create services to those, and pricing and across the board is really what’s made the product and the property successful. People from any walk of life, you can come to the property, you’ll find there’s something there for you.”
TIF drama and the university’s involvement
The biggest controversy related to the expansion is its use of tax increment financing (TIF). TIF is a complicated public funding mechanism that involves freezing and diverting property taxes back to developers to help fund investments that are deemed beneficial inside of designated redevelopment zones. Proponents hail TIF as a means to generate investment in blighted areas, while opponents say it pulls potential tax dollars away from essential services.
When the project was first announced in 2023, Meruelo said he would finance the project privately. He also said the arena “will not cost the university one dollar”, which was later misconstrued as meaning there would be no public funds. Stakeholders since reiterated that Meruelo was referring to the university and not the city.
“The only thing we said is we’re not going to use a dime of university money,” Abraham said. “We want the university to be whole, that they’re not going to have to spend an extra penny to house their games at our arena.”
The official who negotiated UNR’s deal is university President Brian Sandoval, a former governor of Nevada. Sandoval has known Meruelo for more than a decade and is no stranger to the state’s gaming industry.
He served as chairman of the Nevada Gaming Commission from 1999-2001 and later took an executive role at MGM Resorts immediately following his governorship. Last week, Sandoval was also named chairman of the Resorts World Las Vegas board. Jim Murren, the previous board chair, was CEO of MGM when Sandoval joined the company.
Competitors not opposed to project but disagree with TIF
The city of Reno first started using TIF in 1980 and has established two “Redevelopment Areas” that qualify for funding. The second area, known as RDA2, was established in 2005 and encompasses the GSR site. Numerous development projects around the city have utilised TIF in both zones.
TIF agreements are overseen by the city’s Redevelopment Agency, consisting of the mayor and city council. The agency went dormant in 2009 due to the Great Recession but has ramped up activity in recent years. Abraham said that GSR’s $61 million TIF agreement, approved in May, only kicks in “after the arena is built and additional property taxes are levied”.
A coalition of six local operators represented by public affairs firm McDonald Carano sent a letter to the council in March, urging it to reject the funding. Among them were market leaders Caesars Entertainment, Peppermill Resort Spa Casino and Atlantis Casino Resort.
The coalition said it did not “generally oppose the Project itself”. Instead, it took issue with the TIF grant, asserting that the project should not be eligible for such funding. The group argued the affected areas are not “blighted”, according to the city’s standards, and alleged that GSR planned to use the funds for operating expenses rather than development costs.
‘If there’s incentives available to you, then go out and get ’em’
In response, Abraham argued everyone is free to invest in their properties and claim any available incentives. He pointed to Jacobs Entertainment, which did not oppose the project and has also invested significant capital in its gaming and non-gaming real estate projects in recent years.
“Invest in your product, invest in the market, and if there’s incentives available to you, then go out and get ’em, because it’s going to win when the market reinvests in itself and creates a better product and better experience,” Abraham said.
But with regard to TIF specifically, only Caesars operates properties within the two RDA zones. Peppermill and Atlantis are both fenced out of RDA2 and therefore do not qualify for the funding. Representatives from Caesars and Atlantis did not respond to requests for comment for this story.
In April, Caesars regional president Stew Massie told Global Gaming Business that Reno “is incredibly important to us”, and that the company is “consistently working to create the best experiences for our guests at all three of our Reno resorts”. Caesars has promoted live local events like the Great Italian Festival and the Biggest Little Latin Festival, Massie noted.
John Farahi, longtime CEO of Atlantis operator Monarch Casino, expressed similar sentiments to Abraham’s with regard to capital investment. Atlantis completed an extensive remodel this year fueled by Monarch’s significant cash reserves instead of outside funding.
“Those properties that have invested in product, service and location are going to be able to grow more than those who haven’t,” Farahi told Global Gaming Business in April. “There will be a difference for those who have those three elements from those who do not. We compete with any product in northern Nevada, or I would honestly stick my neck out and say, compared to Las Vegas.”
GSR is betting that a state-of-the-art arena will be the catalyst to unlock new growth in Reno, America’s most mature casino market.