Most everyone knows that gaming revenues have dipped a bit, but it’s not every day that the Economist covers Las Vegas, so here it is:
THE media had a field day recently when Charles Barkley, a retired basketball player, was forced to pay a gambling debt of $400,000 owed to Wynn Resorts, a Las Vegas casino operator. It may seem churlish to chase a star as big as the “Round Mound of Rebound” for anything less than a seven-figure sum. But after a long boom, the industry faces a rare slowdown and belts are tightening across Sin City.
Gambling has long been considered all but recession-proof. Only twice have overall revenues on the Las Vegas Strip fallen since it took over from the downtown as America’s gambling hotspot in the late 1980s—most recently after the attacks of September 11th 2001—and both dips were short and shallow. Gamblers, they say, will keep betting as the economy slows, still hoping for that big win.
But Vegas is less about gambling than it used to be. Today only 41% of its revenues come from betting, down from 58% in 1990. These days people are as likely to come for shopping, shows and fine dining as for blackjack or baccarat; the Forum Shops, at Caesar’s Palace, has the highest sales per square foot of any American mall. Today’s visitors are more likely to be worried by broader economic woes than the punters who used to flock to the city were, says Bill Lerner of Deutsche Bank.
It’s always good to get an outsider’s perspective on what’s going on here. I learned a new factoid: that Las Vegas now has 7% of all the hotel rooms in America. That’s staggering.
It’s also nice to be identified as an optimist in the penultimate paragraph. I really think that it’s usually not as good as people think, or as bad as people think. And as I’ve always said, with a finite number of people in the world who are able or willing to vacation in Las Vegas, there is definitely an upper limit to the number of hotel rooms that the city can support. Ultimately, the market will determine what that limit is.
Did you like all of those helpful statistics in there? I’m about 99% sure that they came from the Center for Gaming Research’s Gaming Abstract, and this is exactly why we’ve put so much energy into assembling it. It’s refreshing to see it get some good use.