Is Las Vegas the Next Detroit?

Nevada has the highest unemployment rate in the county. Vegas gaming revenues have started to slowly recover but are down double digits from their 2007 peak. Reno has seen gaming win drop by a third in the past 10 years, in a large part due to the competition from Northern California Indian casinos.

My question is:

Which way does Vegas go? Does Vegas offer a sufficiently differentiated experience to continue to grow or will the expansion of casinos across the country cause it to lose additional business like Reno?

And if Vegas starts to lose gaming revenue that city will turn into the largest ghost town in history, because gambling is all it has.

 

If they stop charging so much for hotels, food and other stuff, which used to be incidental cost but now can make the non-gambling overhead run between $500 and $1,000 for a weekend, they'll be fine. If they don't, then they're stupid.

Their call, really.

 

You'd be surprised just how many worldwide douchebags will spend insane amounts in the so-called prestige clubs, with table service and laughable markups on $45 bottles of vodka, not to mention Cristal.

As long as the broad US economy gets no worse, they should be all right. It remains Mecca, for many. Just another example of the old story, recently -- gross overbuilding, which proceeded to look really, really stupid when the shit hit the fan big-time a few years ago.

But the hospitality industry still continues to deal with contraction, and a lot of the jobs which were there in 2008 are probably gone for another decade, at least.

 

Yep. Tell the people selling $80 pot pies at Michael Mina that Vegas is going under.

 

Would lower room and meal prices really make that much of a difference? 20 years ago if you wanted to gamble there were basically three places you could go in the U.S. Now casino gambling has been legalized in most states. If you want to gamble you can do it closer to home and save on airline tickets.

Is Vegas worth a plane trip? Personally I think it is worth seeing once for the glitz and kitsch. But that's it.

 

The thing is, the most loyal customers for Vegas are ones from overseas for whom money is no object, and young hipsters for whom money and credit cards are no objects. It has given up on its 1990s efforts to be family friendly, and has pretty much painted itself into a corner of being over the top, and having far too much sunk in to become a center of grind joints again.

 

I used to go a ton, now I try to go once a year, more because of the kid life than anything Vegas did. But many many times I have looked at the possibility of going, seen all the charges too high, and said forget it -- either go to Reno/Tahoe or just skip the trip entirely.

There's also great snob appeal in not getting below $10 (or often $15 or even $25) minimum tables. I've walked past pits that sat entirely open and not one attempt to bring the prices down. I'll bet high when I'm winning and have a bankroll, but I also like the option of going $5 or $10 at the start and through a slow patch, and other places meet those needs a lot better than Vegas does.

Don't know if my demographic group is big enough to matter or give a full picture, but most of the people I know -- people who went to Vegas quite a bit in previous decades and who still love to gamble -- find other options for this very reason.

 

This ... This is why I have NO desire to go to Vegas.
My wife has had a number of conferences in Vegas, but I told her I don't want to go.

My boss goes two or three times a year. He used to stay at Circus Circus for $59 bucks a night and a great sports book according to him. Or maybe the sportsbook was close by, I forget ...
Though I think he went for the hookers and stayed at Circus Circus because of the super thick walls.

 

Having lived in several states where gambling is not legal (and hoo boy do I miss Mohegan Sun now), I will say this: Vegas is worth it to me. Course, I've never been and I'm SUPER PSYCHED about my first trip in like six weeks.

 

If what you want from Las Vegas are slot machines in the casinos and table games, then indeed there is a boatload of competition for Las Vegas today that was not there 20 years ago.

However, if you go to Las Vegas for more than that, the competition comes up short:


Sportsbooks abound in Las Vegas. I have yet to find an Indian casino that has one - - there may be some but I have not found them.

The hotel accommodations in Las Vegas are far better than most of the "competitors".

The shows and headliners in Vegas are a light-year better than the competition.

The restaurants - - and the range of restaurants in terms of price, cuisine and ambience - - in Las Vegas is way beyond any other venue in the US.



Is Vegas expensive? Yes. Might they have to change the price structure to maintain market share and revenues? Possibly. Nonetheless, Las Vegas is very different from its competitors to the degree that it will likely survive even if the US economy does not recover strongly for the next 2-4 years.

 

So long as there are gambling addicts, Vegas will survive.