With a big push from Northern California's Indian casinos, one of Reno's largest casinos has fallen into Chapter 11 bankruptcy protection.
The Silver Legacy, once hailed as the savior of Reno's troubled casino industry, has instead become the most visible symbol of Northern Nevada's inability to draw gambling tourists from California.
The 37-story resort, with 1,700 rooms, a laser-light show and a silver-mining rig looming over the casino floor, filed for bankruptcy reorganization last week.
The filing followed the collapse of a deal to restructure $142.8 million in debts.
The Silver Legacy, which opened in 1995, was a $300 million-plus joint venture between MGM Resorts and Don Carano and his wife, Rhonda, who own the adjacent Eldorado hotel and casino in Reno. They also own Ferrari-Carano winery in the Dry Creek Valley and Vintners Inn in Santa Rosa.
The Silver Legacy will stay open. In a letter posted on the resort's website, chief executive Gary Carano promised "business as usual."
The Silver Legacy was built with the intention of helping Reno win back customers from Las Vegas.
But Nevada casinos have seen their market shrink dramatically since 2000, when California voters approved full-fledged Indian gambling. In particular, the opening of Thunder Valley Casino near Lincoln in 2003 has peeled away scores of Bay Area and Sacramento residents who used to flock to Reno.
The Silver Legacy "was built on a false premise ... that there was going to be growth," Reno gambling consultant Ken Adams said. "We didn't fully understand how big a deal California was going to be."
Since 2000, annual gambling revenue in Reno has fallen by one-third, according to the Nevada Gaming Control Board. The decline was accelerated by the recession, which torched the city's real estate market. In 2008, Fitzgeralds hotel and casino closed.