The most obvious border businesses are the casinos on the borders of Nevada. Towns like Primm, Wendover, Laughlin, Jackpot, Mesquite, and Stateline largely consist of casinos that are positioned right on the border with a neighbor state. Since gambling is legal in Nevada, but not legal (for the most part) in neighboring Arizona, California, Idaho, and Utah, casinos are positioned to take advantage of this difference.
This difference makes the real estate directly on or very close to the border much more valuable. Any land between your casino and the border presents the opportunity for a competitor to build its own casino and potentially attract the customer that has crossed the Nevada border with the intent to gamble.
Casinos might be the most obvious example of a border business, but they aren’t the only one.
8 Other Border Businesses You Can Own
1. Liquor and Beer Stores in Wet Counties – Texas has a system where some counties are dry and others are wet. Of the 254 counties in Texas, 7 are completely dry, and 194 are partially dry. They either completely restrict or partially restrict the purchase of alcohol. If a dry county borders a wet county, you can rest assured that people will drive to the wet county in order to buy beer or liquor. The best-positioned liquor stores at the border do very well. Also, Oklahoma requires beer to be a lower proof, so beer stores on the Texas side of the border can attract people wanting to buy regular beer instead of “near beer.” There is a liquor store in Fredonia, Arizona, that takes advantage of the fact that you cannot buy hard liquor in neighboring Kanab, Utah, after 5 pm.
2. Lottery-focused Convenience Stores – ironically in Primm, Nevada, there is a border business which complements the main border business of a large casino resort. Gambling may be legal in Nevada but the state has no lottery and does not participate in Powerball. Las Vegans make the 40 minute trek to Primm to buy lottery tickets from the Primm Valley Lotto Store at 31900 S. Las Vegas Blvd., Nipton, CA 92364. It is directly on the California side of the state line.
3. Quickie Wedding Chapels – WSJ reported on a Maryland wedding chapel that may be going out-of-business after almost 100 years. It came into business because neighboring Delaware required a waiting period of 24 hours for residents and 96 hours for non-residents. Maryland did not, so couples looking to get married quickly would come to Elkton to get married. After Maryland passed a similar law, couples kept coming to Elkton due to a military exemption and the lack of a blood test requirement. Eventually people started coming to Elkton to get married due to its nostalgia and history, but now that seems to be petering out.
4. Car Lots in No Sales Tax States – people increasingly research and buy cars online, so being the first lot at the border has been heavily diminished. Also, states generally require you to pay sales tax in your home state from a car you buy in a neighboring state. However, there is still some benefit to businesses in states like Oregon that have zero sales tax. Auto shoppers will drive from Vancouver, Washington, across the Columbia River to Portland, Oregon, in order to buy cars. They will have to use an address in Oregon and put an Oregon plate on their car, but some people are willing to do that in order to save thousands of dollars on a car purchase.
5. Fireworks Stores – laws on fireworks vary quite a bit among jurisdictions; in some states or cities, they are completey illegal. South of the Border in Dillon, South Carolina, is a semi-famous gas station, hotel, convenience store, and restaurant just south of the North Carolina border. Its early success was owed to the fact that beer was legal in Dillon, South Carolina, but illegal in the adjacent county in Rowland, North Carolina. It later took advantage of the fact that fireworks were completely illegal in North Carolina by offering a massive variety of fireworks for purchase.
6. Outlet Malls – there is an enormous outlet mall almost directly on the Mexico border in San Ysidro, California, called Las Americas Premium Outlets. Tourists stream in from Tijuana to buy American brand name products like Nike, Polo, Coach, Vans, New Balance, and The North Face.
7. Dentists in Mexico – senior citizens living on a fixed income in Yuma, Arizona, and Winterhaven, California, are increasingly crossing the border into Los Algodones, Mexico, for routine teeth cleanings and other dental care. The prices are substantially below what American dentists charge. Some of the most prime real estate near the border crossing is no longer just pharmacies selling prescription-free drugs; but now includes many dental offices. Some American landlords have bought some of this real estate.
8. Warehouses – warehouses have sprung up in New Hampshire to serve the Boston market. Businesses can store their product there without incurring inventory taxes. The amount of regulation in general is lower than what they would incur in Massachusetts.
How to Make Your Border Business a Success
The neighboring jurisdiction is doing you a favor in restricting competition. They cause an under supply in their area while increasing demand in yours.
You need to control the real estate in order to take advantage of this.
For a retail business, this means owning a good, typically flat and highly visible lot at or near the border, with great ingress and egress (access), on the high traffic road running from one jurisdiction to another.
Its also important that the laws stay relatively the same. Atlantic City, New Jersey, got killed when gambling started to become prevalent all up and down the East Coast either in Indian casinos and other casinos which were allowed to open.
A business in a sparely-populated county which is there primarily to serve the alcohol needs of a population which is 20 minutes away, may cease to serve anyone if its customer base can suddenly by alcohol closer to home because the laws changed.