RENO -- Four years ago, Reno's economy glittered as brightly as its casinos.

"The Biggest Little City in the World" created jobs faster than anyone, often at California's expense, luring companies across the state line. A national magazine anointed Reno, with its low taxes and low-regulation climate, America's hottest spot for business.

Now the lights are dimming on the casinos and most everything else. Unemployment was 12.4 percent in August, the latest month for which statistics are available -- four-tenths of a point higher than it was in Sacramento. The gambling industry is in retreat, and the collapse of the real estate market has exposed a "shallow economy," said one California consultant. The state of Nevada just raised taxes by $1 billion.

But the cross-border poker game with California isn't over, and Reno isn't folding.

The Economic Development Authority of Western Nevada (EDAWN) just launched a new recruiting offensive. The organization is going after green-tech companies, with California a big target. Next up: life sciences and software companies.

EDAWN says a weak economy doesn't undermine its message. The fundamentals that lured such employers as Microsoft and Amazon.com to Reno are still here: low costs and little red tape. Although the sales, hotel and payroll taxes have gone up, there's still no income tax.

Besides, California remains an all-too-easy target. Its ongoing economic and budget troubles "play into our hands," said Chuck Alvey, EDAWN's chief executive.

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