Here’s more evidence that Las Vegas never was recession-proof. This is taken from Parry Thomas’ biography, Quiet Kingmaker. As the most important banker to the gaming industry from 1955 to the 1980s, he knows what he’s talking about:
In my first twelve years here in Nevada [1955-1967] we went through at least three depressions locally in Las Vegas. Things got really tough and it was very hard to keep some of these places going…there were only two hotels on the Strip by the mid-1960s that didn’t have to go through some financial restructuring, and those were the Desert Inn and the Sands.
from Jack Sheehan, Quiet Kingmaker, page 161
The idea that Las Vegas is recession-proof is a myth that people started selling in the mid-1970s, just as corporate investment was starting. While the rest of the US was in bad shape, gaming revenues kept on rising. So everyone figured, “Wow, casinos are recession-proof!” It sounds really good when you’re making a pitch to investors, I guess, so it keeps cropping up, even though people in the industry have been admitting that it’s not recession-proof since the late 1970s.
I’m not even convinced the industry was recession-proof in the early 1970s. Part of the reason that revenues were rising, I suspect, is that skimming was slowing down. For all we know, Las Vegas casinos actually made less in the early 1970s, but their reported revenues just kept climbing. It’s frustrating that this can never be proven, since evidence of the skim is, by its very nature, non-existent.
Claiming that the events of the past 18 months have, for the first time, made people realize that Las Vegas isn’t recession-proof is like saying that, before Columbus, everyone thought the world was flat. Some people did, but those who cared to study the problem already knew the world was round, long before Columbus sailed. The evidence has been there, if we had cared to look.