Vegas, Casinos Lose Their Luster: So Over It

LAS VEGAS (TheStreet) -- When the names of films featuring Las Vegas went from Swingers to The Hangover, it was a sign that gambling had lost some of its luster. The recession has chased those losses.

Gambling regained its cachet in recent years as the bull market and housing boom filled the pockets of aspiring high rollers. Atlantic City, N.J., and even cities previously without slot machines started rolling the dice by adding casinos and video poker. Soon even amorous grandmothers were saying "What happens in Vegas stays in Vegas."

The roulette wheel has since been relegated to the realm of hard-core players and seniors on bus trips. Even if Viacom(VIA)(VIA.B) and MTV took a gamble on another "Real World Las Vegas," it wouldn't be enough to save the former Sin City and other domestic gaming destinations from economic reality.

"The problem is the economy -- why wouldn't it be?" says Michael Bluejay, editor of industry site VegasClick.com. "Unemployment is up, disposable income is down, and casinos are funded almost entirely from disposable income."

U.S. consumers spent $32.5 billion on casino gambling last year, the lowest level in almost three years, according to the American Gaming Association. The public's perception of gambling as "perfectly acceptable for anyone" fell from 57% in 2003 to 43% last year.

This slump is personified in the faces, or lack thereof, around game tables in Vegas. Traffic at McCarran International Airport is down 12% this year from last. Meanwhile, room rates in town have dropped 27% from last year to a median price of $97 a night, according to the Las Vegas Convention and Visitors Authority. Vacancies climbed by 6% during the first five months of the year compared to last year, and 22% fewer conventions came to town during that period.