Las vegas
Introduction and Purpose
Las Vegas is one of the most famous, popular, and profitable gaming and tourism destinations in the world. Beginning from the 1980s, Las Vegas has developed itself through a series of strategic branding efforts, smart positioning, catchy marketing and advertising campaigns, and the development of mega resorts and entertainment centers. To understand how Las Vegas has become the gaming and tourism hotspot that it currently is, the gaming history of Las Vegas must be studied: the government’s role in legalizing gambling and transforming the gaming industry, the debates over the social costs vs. social benefits of the gaming industry, and the game-changing megaresort hotels targeting families that opened on the Las Vegas strip.
Looking at current times, the marketing strategies of Las Vegas have shifted from targeting families to bringing the ‘sin’ back in ‘Sin City,’ creating the image of a hedonistic playground. Yet, the glory and success of Las Vegas has been threatened by the recession. It is essential to see just how the economic downturn has affected Las Vegas, in order to forecast the future of Las Vegas from here on out. The purpose of this paper is to study and understand the past and present Las Vegas; to see the path of development Las Vegas has undergone in order to posit the future of Sin City.
A Brief History of Casino Gambling In the United States
Gambling was legalized in 1931, in the midst of an economic depression (Hsu 1). The purpose of legalizing what was then perceived to be an immoral activity was to obtain the tax and economic benefits that gambling could produce, and to reduce the “corruptive effect” of illegal, uncontrolled gambling (4). Joseph Schumpeter noted in the 1930’s that providing a new good to the consuming public results in economic growth (Walker 5). Because gambling was once an illegal activity, the legalization of it was equivalent to introducing a new good to the public. And so, after gambling was legalized, there was a huge explosion in the popularity of gaming, and immediate economic growth as a result of legalization (Hsu 5).
After seeing the great economic boost of casinos, the general view of gambling changed—while gambling was once viewed as being ‘tolerated’ and as a ‘necessary evil’ in society, public policy officials now view gambling as an integral part of the entertainment industry (McGowan 14). The numbers back this up: in 1999, the gaming industry became the largest segment of the overall American entertainment industry; Out of the nearly $100 billion spent on American entertainment, gaming expenditure was 36% of that total, while movie admissions was 7% and spectator sports were 7% (24).
The Rise of Las Vegas as the Casino Gaming Capital of the United States
Nevada was the only legal casino gaming jurisdiction for 45 years, until Atlantic City was approved for casino gaming (Hsu 5). Thus, since the legalization of gaming, Las Vegas has always been the first and foremost epicenter of casino gambling in the United States. Las Vegas casinos began to be built and operated in the 1940’s, and for forty years, Las Vegas casinos were associated with mobsters (Hsu 15). Regardless of the little number of hotels that were actually under the mob’s influence, this image prevailed until the 1980’s, when a new era dawned upon Las Vegas. In 1989, the Mirage hotel opened, and it changed the whole way Las Vegas operated and was viewed by the public. This is because the Mirage was the first of a new breed of hotels in Las Vegas: the ‘megaresort.’ Las Vegas had always been the ‘traditional’ market for casino gambling; casino operations were just that—casino operations. However, the Mirage marketed itself as a ‘family oriented vacation center’ or ‘super casino’ (9). At these mega resorts, gambling was only part of the total experience; now, adults would feel comfortable taking their families to Las Vegas and enjoying the city together.
The Mirage billed itself as a resort that happened to offer casinos, instead of as a casino only. It became a ‘must-see’ Polynesian-style attraction with a $31 million erupting volcano outside the hotel, and a 20,000 gallon aquarium inside containing exotic tropical fish (McGowan 35). The opening of the Excalibur in 1990 continued the expansion of this new breed of mega-resorts, which became huge ‘demand generators’ and attracted new players and visitors (Laventhol & Horwath 1990, 21). The Excalibur had a medieval times atmosphere, with costumed hosts (McGowan 35). The Mirage and the Excalibur were the first major hotel/casinos to be constructed in Las Vegas since 1974, and added 7,000 rooms to Las Vegas’ room inventory (Laventhol & Horwath 1989, 21). MGM also renovated its casino operations and built a theme park, and because of these actions, MGM experienced success as well; MGM saw a 22 percent increase in gaming revenues and a 24 percent increase in visitors during the early 1990s as a result (McGowan 10).
The opening of these megaresorts in Las Vegas had great effects on the trends and numbers of the tourism and gaming industries of the entire country. In 1993, casino gaming became the preferred form of gaming in the United States; casino gaming revenues were greater than lottery revenues for the first time in history (McGowan 9). In addition, although it had been predicted in the 1990 Annual Study of Financial Results and Reporting Trends: U.S. Gaming Industry that the latter half of 1989 would see a flattening in growth of casinos in the U.S., there was actually a sharp turnaround in December 1989 due to the opening of the Mirage in Las Vegas (21). Statewide casino revenues for Nevada dramatically increased also as a result of the new megaresorts opening. In 1989, according to the 1990 Annual Study of Financial Results and Reporting Trends: U.S. Gaming Industry, statewide casino revenues were $4.5 billion, a 10.2 percent year-to-year increase over the $4.1 billion in revenues for 1988 (21). In Nevada, the Las Vegas Strip represented 47% of the state’s total casino/hotel revenues (21). Casino revenues of the Strip’s 27 operations also passed the $2 billion mark, a figure in excess of what the entire state produced in 1979 (21). This number was a 6.4% increase over the previous year (21).
In addition, by the end of 1990, Las Vegas had the largest number of hotel rooms of any city in US. Over one million square feet of convention space was also added, cementing Las Vegas as a major convention destination. In the study, Laventhol & Horwath predicted that though the sudden influx of new rooms and casino space would at first adversely affect the profits of some casinos, over the long term, with the excitement generated by these changes, Las Vegas will emerge as an even more powerful magnet for tourism. They were right.
By 1999, gaming in Nevada represented 40% of the total US non-Indian casino gaming market (McGowan 30). As a result of the new breed of super casinos, Las Vegas has become the city where there is just too much to see and do in a few days. The average length of stay in Las Vegas had a 12% increase between 1998 and 1999, and there was an increase of 18% in Las Vegas visitor spending between 1998 and 1999 (37). The Las Vegas Visitor Profile Study showed that there was a 19% increase in gambling budget, 14% increase in lodging, 21% increase in food and drink, a 10% increase in shopping, and a 21% increase in show revenues (McGowan36). In 1999, Las Vegas gaming had a 18 percent increase of in gaming revenue, yet, had an even larger 31 percent increase in non-gaming revenue. (37).
The huge increase in non-gaming revenue can be attributed to several main factors, according to McGowan (37). First, Las Vegas became a fine dining attraction—Las Vegas is now famous both for its cheap buffets and five star, celebrity-chef headed restaurants. In addition, Las Vegas shows have become more and more elaborate and expensive over the years, hosting top stars such as Barbara Streisand, Elton John, and Celine Dion; there are also specialty shows such as the Cirque du Soleil shows, and of course, boxing events. There also has been a tremendous success in Las Vegas Strip retail stores. In 1999, 53% of visitors shopped while in Las Vegas (37).
Social Costs of the Gaming Industry
Despite the beneficial and attractive economic growth, tax revenue, and employment effects of casinos, there are still many ongoing concerns and debates over the casinos causing gambling addictions, which result in damaging social costs (Walker 2). The casino industry has maintained through the years that its product is just a form of entertainment, much like watching sports or movies, which also have prices attached to them. However, researchers argue that gambling is fundamentally different from other forms of entertainment because of the social costs of gambling addictions. A social cost is defined as a “reduction in social real wealth”—the wealth spoken of here does not refer to cash money, but rather, whatever is valued by individuals (88).
Addicted, pathological gamblers inflict high social costs, which could actually offset the economic benefits of casinos. Many researchers have written about the social costs of gambling addiction, which include: loss of income from missed work, decreased productivity on the job, depression and physical illness related to stress, increased suicide attempts, bailout costs, unrecovered loans to pathological gamblers, unpaid debts and bankruptcies, higher insurance premiums resulting from pathological gambler-caused fraud, corruption of public officials, strain on public services, industry cannibalization (that is, other industries suffer losses due to casinos opening in a town or city), and divorces caused by gambling (Walker 87). Thompson did a study in 1997 about the annual societal cost (in dollars) per compulsive gambler. He found that for one compulsive gambler, the social cost is about $9,469. This includes therapy ($361), unemployment compensation ($214), bad debts ($1487), bankruptcy court costs ($334), welfare costs ($334 – food stamps and aid to dependent children), and criminal justice costs ($3,498 – thefts, arrests, incarceration) (Walker 98). These social costs are unloaded unto others, and not paid by the addicted gambler, which is also why Thompson did not include any figures concerning money stolen by a compulsive gambler, which he considers to be a wealth transfer, not a social cost. Walker and Barnett also studied the emotional costs that pathological gamblers impose on to their friends and families; these emotional burdens can also be considered to be social costs (Walker 101). Bailout costs are not, according to Walker, considered to be social costs, but this is just another negative effect of gamblers’ addictions.
Identifying a Gambling Addiction
A person with a gambling addiction is not just someone who likes to go and gamble a lot; there are several tests that can diagnose a pathological gambler. The DSM-IV is a diagnostic instrument used in psychology and psychiatry that classifies gambling addictions by asking a number of questions. A person is diagnosed as a pathological gambler if he or she can be described by five or more of the following conditions (DSM-IV 1994, p. 618):
The person…
is preoccupied with gambling (e.g. preoccupied with reliving past gambling experiences, handicapping or planning the next venture, or thinking of ways to get money with which to gamble)
needs to gamble with increasing amounts of money in order to achieve the desired excitement.
has repeated unsuccessful efforts to control, cut back, or stop gambling.
is restless or irritable when attempting to cut down or stop gambling
gambles as a way of escaping from problems or of relieving a dysphoric mood (e.g., feelings of helplessness, guilt, anxiety, depression).
after losing money gambling, often returns another day to get even (chasing one’s losses)
lies to family members, therapist, or others to conceal the extent of involvement with gambling
has committed illegal acts such as
Has jeopardized or lost a significant relationship, job, or educational or career opportunity because of gambling
relies on others to provide money to relieve a desperate financial situation caused by gambling
(Walker 168-169).
It is important to ask gamblers how the person financed his/her gambling, and the maximum amount lost in one day, because clinicians rely on these estimates to measure the reduction in gambling activity post treatment (Walker 120). It is difficult however, to derive and calculate gambling losses, because gamblers often don’t know how much money they have spent and who they have borrowed from (because they’ve borrowed from so many people) (121).
Thompson and Schwer also estimated the social costs of gambling specifically in Las Vegas alone. They estimated that 3.5% of the population is a pathological gambler (which translates to about 38,571 adults), with an estimated cost per gambler of $10,053 per year, and a total estimated cost per year of $387.8 million (Walker 130).
Why the Debate over Social Costs Is Relevant
Understanding the social costs of gambling is essential to exploring the success of casinos, because casinos often aggressively market to consumers who have high gambling addiction rates within their communities. For instance, casino operators aggressively pursue Asians both domestically and abroad. These targeted demographics include the newly wealthy Chinese (who have recently become Las Vegas’ best customers), Asian-Americans, and recent immigrants from the Pacific Rim (Rivlin).
One major effort to cater to Asian customers includes redesigning huge portions of casino floors in order to appeal to the tastes of Asian guests. Harrah’s Entertainment, which owns casinos in Atlantic City and Las Vegas, has been a trend-setter in this field. In early 2006, Harrah’s opened a gaming and dining area, inspired by Ming- and Song-dynasty architecture, at the Showboat in Atlantic City (Rivlin). The company imported carved woods from China in order to create a dozen baccarat tables (which is the preferred game for many Asian players), and several tables for pai gow poker. Other casinos have followed suit, such as the Trump Taj Mahal in Atlantic City and Mohegan Sun in Connecticut, which have also built all-Asian gambling pits. Due to these efforts, table game revenue at the Showboat increased 35% in 2006, which was an increase from $46 million to $63 million. The casino also doubled its business among its Asian players. In Las Vegas, these successful changes are also being implemented—Asian-themed baccarat salons are spreading across Las Vegas, and this is solely due to its popularity among the Chinese, according to William Weidner, the president of Las Vegas Sands (which is the parent company of the Venetian).
The reason for these high-cost changes are because of high rollers, sometimes called whales, who are the incredibly wealthy V.I.P.’s who will risk millions of dollars over a single weekend, or tens of thousands of dollars on one hand. 80 percent of Las Vegas’ biggest whales are from Asia, most of them baccarat players from China and Hong Kong (Rivlin). According to Weidner, the Asian customer usually spends much more of their disposable income on gambling, and even is known to take their meals in the baccarat salon. Mr. Weidner recognizes the importance of his Asian guests and their money to his business. He even travels to Hong Kong with an interpreter in order to design his casinos with the advice of a feng shui master.
The problem with marketing to Asian customers isn’t with these whales from overseas, but with the aggressive marketing tactics used to woo less-affluent Asian-Americans. Las Vegas casinos create advertisements written in Asian dialects, and place those advertisements in Asian community newspapers in cities near Las Vegas (Rivlin). They also send out mailers written in a recipient’s native language, and dispatch special buses to any Chinatown within a day’s drive. According to Dr. Fong, the co-director of the Gambling Studies Program at the University of California, Los Angeles, the impact of these efforts is major and widespread. Gambling is an enormous part of Asian culture, according to Kent Woo, the executive director of the NICOS Chinese Health Coalition in San Francisco, and Woo feels that casinos are exploiting those cultures and creating addictions within the communities. Asian activists are very concerned, upset, and even extremely angry over the marketing efforts by casino companies, because studies have suggested that Asians have higher rates of problem gambling than any other groups. A long-term study by Dr. Fong suggests that “Asians are three times as likely as other groups to develop a serious gambling problem.” It must be noted though, that this conclusion is based only on a small sample of Asian-American gamblers living in Los Angeles. Even still, the California government has seen fit to take steps to help the Asian-American community with their gambling addictions. The government created an Asian Pacific Islander Problem Gambling Task Force in 2004; the focus of this group is to provide treatment and prevention programs for Asian-Americans who cannot speak English.
It is important to recognize that gambling brings about not only social benefits, but harmful social costs as well. Casinos do impact the communities around them enormously, and they quite possibly are even taking advantage of the weaknesses of a certain community to gamble, in order to drive up revenues and profits. Dr. Fong says, “If there’s this hidden problem of addiction that’s not being addressed, and that’s what we think is happening, it will slowly eat away at the fabric of the community” (Rivlin).
A Change in Focus—“What Happens Here Stays Here”
Although Las Vegas gained its popularity as a tourism hotspot by becoming a family-friendly destination, in recent years the unofficial motto of Las Vegas has been that “sin is in again” (McMullen). In the early 2000’s, due to savvy marketing, Las Vegas enjoyed a renaissance of sorts, in which there was a newfound wave of popularity for casinos and gambling (Bogomolny). In January 2003, the Las Vegas Convention and Visitors Authority launched a $58 million, 20-month campaign centered around the new tagline for the city of Las Vegas: “What Happens Here, Stays Here” (Thomaselli). This old catchphrase has invaded popular culture, and Las Vegas once again had a new, successful image that redefined the city. Billy Vassiliadis, CEO of R&R Partners, which created the campaign, says that the tagline has become so popular because he researched what it is that makes people want to visit Las Vegas; he found that Las Vegas had a “liberating capacity” for people—people go to Las Vegas to do and eat and see things they wouldn’t dream of doing back at home. The campaign consisted of sexy, edgy “Vegas stories” commercials, which, according to USA Today’s Ad Tracker, was the seventh most likeable campaign, and tied with Citibank for the most effective campaign of the year. Pleased with the success of the ads, the Las Vegas Convention and Visitors Authority rolled over R&R’s contract for an additional five years, less than six months into the launch of the campaign (Thomaselli).
Not everyone loves and supports this campaign though—many company executives disapprove of the hedonism-encouraging campaign. Steven Hacker, president of the International Association for Exhibition Management, Dallas, said that this campaign is “not the most effective message to send into the business sector,” as executives are the ones who decide where conventions are held (Thomaselli). The image of a company may be blemished if the company holds their conferences and conventions in Sin City, where anything goes, and “What Happens Here, Stays Here.” However, according toTerry Jicinsky, senior VP-marketing for the Las Vegas Convention and Visitors Authority, “convention attendance increased by 12.9% in 2003 compared with 2002, and conventioneers’ non-gaming economic impact was up 11.8 % last year compared to the previous year.”
Even with disapproval of the sin campaign from corporations, the use of sin to attract visitors has made a strong comeback in Las Vegas- after all Las Vegas’ nickname is Sin City. An increasing number of Las Vegas hotels and resorts are offering more adult-oriented accommodations and entertainment (McMullen). Las Vegas is moving away from targeting families, and moving towards marketing particularly to “twenty-and thirty-somethings, who have no ties and want to really spoil themselves,” according to Erika Yowell, senior manager, media relations for the Las Vegas Convention and Visitors Bureau (McMullen).
The numbers show that there has been success in marketing Las Vegas as an adult playground: the median age of visitors coming to Las Vegas dropped slightly, to 49 in 2004 from 50 in 2003, with the largest increase in visitors in the 21-29 and 31-39 age sets (McMullen). McMullen says that this could be attributed to the wildly popular “What Happens, Here Stays Here” tourism campaign, which encourages “adults to lose their inhibitions.” In addition, hotels and casinos are marketing more heavily to adults through magazines such as GQ, Playboy and InStyle.
The Palms Casino Resort has enjoyed particular success in this Las Vegas renaissance of glitz, glamour, and sin, by using innovative marketing in order to target the single, adult demographic. The four Maloof brothers, who are the billionaire co-owners of the Palms Casino Resort, are masters of marketing (Bogomolny). The Maloofs understood that competition is extremely fierce in Las Vegas, and that they needed to establish a brand in order to attract customers and sustain their business. The Maloofs started off by buying less-expensive real estate not located on the densely packed and competitive Las Vegas Strip. Then, after the resort opened (to not extraordinary success), George Maloof convinced the producers of MTV’s The Real World to film a season at the Palms (Bogomolny). The Maloofs paid $1.5 million to renovate the 28th floor of their hotel, creating a posh home for the seven strangers who would live together and film a reality show together. Once the show aired in 2002, things turned drastically around, and the Palms became enormously successful due to its appealing to youth.
The history of Las Vegas’ success revolves around the hotel and casino industry targeting families and older visitors but the Maloofs “tapped into a severely underserved market in Vegas: youth” (Bogomolny). With The Real World, the Maloofs revitalized the old image of gambling as “a fun social pastime,” and Las Vegas as the place to enjoy one’s youth. While the average age of a Las Vegas tourist was 59 at the time, the average Palms hotel guest was under 35. The success of the Palms came from their mantra to “get customers while they’re young, [because] you’ll commit them to your brand for life” (Bogomolny).
The Palms continues to uphold its hip image today by milking all the celebrity connections it can. The Maloofs do whatever they can to attract the “young, rich, famous and beautiful” to “pull in celebrity-obsessed customers” (Bogomolny). In addition, the Maloofs realized the importance of cross-promotion. The Maloofs own the NBA team the Sacramento Kings, and so the Maloofs advertise at Arco Arena, which is where the Kings play. After their carefully crafted success, the Maloofs have enjoyed the fruits of their labors – they unveiled a $600 million expansion of their relatively small hotel (the Palms opened with only 425 hotel rooms, compared to the average 4,000 hotel rooms of the hotels on the Las Vegas Strip) (Bogomolny). They constructed 599 condominium units adjacent to the hotel, and built an additional “347-room hotel tower themed with party suites and Playboy branded high-end lounge and retail venues,” and “46 mega suites and sky penthouses complete with features conducive to fostering the escapist mentality, such as extra sound insulation, private swimming pools, fireplaces and even basketball courts” (McMullen). The Maloofs became the faces of the new Las Vegas, showing the city what it takes to revitalize and attract new types of customers in such a densely competitive industry.
Many other hotel corporations have followed suit in targeting young visitors. Hooters of America purchased Hotel San Remos on Tropicana Avenue, and spent $130 million to renovate and rebrand the 711-room property into a Hooters Casino Hotel (McMullen). MGM Mirage has change the image of Treasure Island, a 2,885-room hotel that opened in 1993, to that of an “an exciting and energetic adult atmosphere,” as described as Tom Mikulich, president of MGM Mirage. Treasure Island, like several other casino resorts in Las Vegas, has reduced amenities targeted towards children, and added attractions appealing to more mature audiences. Mikulich says of the changes to Treasure Island: “We downsized our arcade, added a sultry nightclub, changed out the skull-and-crossbones marquee for more contemporary signage and enhanced the pirate show to include the sexy Sirens of Treasure Island” (McMullen).
In addition, there had been an increasing demand for more exciting nightlife, and the existing hotels took notice, building more nightclubs and adult-themed shows. The MGM Grand, which opened in 1993, recently opened a nightclub, Tabu. New York, New York, which has been in operation since 1997, offers a sexy Cirque du Soleil show called Zumanity. The Hard Rock Hotel and Casino, which opened in 1999, also opened a nightclub named Body English. The new goal of the 2000s was for Las Vegas hotels to bring in the young late-night partiers to their properties.
Effects of the Recession on Las Vegas Tourism & Gaming Numbers
Even though Las Vegas has been one of the “fastest-growing metropolises in the U.S.” for twenty years, Las Vegas has not been immune to the economic downturn (Stein). In fact, Las Vegas has been especially hit hard by the recession; in 2009, Las Vegas tourism and gaming numbers suffered record hits. The Las Vegas Convention and Visitors Authority reported that in 2008, visitor volume was down 4.4 percent to 37.5 million, occupancy rates went down 4.4 percentage points to 86 percent, and the average daily room rate lowered 9.8 percent to $119.19 (Velotta). These decreases can be attributed to frozen credit markets, increased unemployment, and volatile fuel prices, which resulted in reduced consumer confidence, and a decrease in spending for travel and tourism.
The state Gaming Control Board reported its numbers for the fiscal year 2008 (the last six months of 2007-2008 and the first six months of 2008-2009), and gaming win had its “steepest percentage decline in history” (Velotta). Clark County’s gaming win was $771.8 million, down 18.4 percent from the same month a year earlier. The Strip’s win was down 23.2 percent to $474.2 million. In the Southern Nevada submarkets, downtown Las Vegas’ win decreased 17.5 percent to $41.3 million, the Boulder strip was off 9.2 percent to $76.3 million, Laughlin fell 18 percent to $37.4 million and Mesquite was down 25.1 percent to $10 million.
The tourism numbers for December 2008 were in line with the state’s gaming figures. Visitor volume decreased sharply by 10.9 percent to 3 million—this was 2008’s worst monthly percentage decline (Velotta). In addition, Las Vegas’ occupancy fell 9.9 percentage points to 73.3 percent, which is also the worst monthly percentage decline of the year. December’s average daily room rate was off 14.2 percent to $96.39; this was the first time in 2008 that the rate went below the $100 mark. This is especially shocking when considering the fact that the average daily room rate and occupancy levels in 2008 were at record highs a year earlier.
Las Vegas, which is the number one convention city in the U.S., has also seen a sharp decrease in convention travel (Stein). Convention attendance for December fell 4.7 percent to 123,588, also the worst month of the year (although to be fair, December is traditionally the worst performing month for conventions) (Velotta). For the entire year though, convention traffic fell 5 percent to 5.9 million. The number of meetings held was down 16.7 percent in December to 1,071. For the year, it was off 5.8 percent to 22,454.
The decrease in convention traffic can be attributed to the “AIG effect” (Stein). Sheldon Adelson, a majority owner of Las Vegas Sands, and a casino legend, believes that part of the reason why convention travel has taken a hit is due to Obama “vilifying” Las Vegas (“Vegas Mogul”). In February 2009, Obama made the following comment: “You can’t take a trip to Las Vegas or down to the Super Bowl on the taxpayers’ dime.” The combination of scandal over bailed-out banking companies such as AIG still taking lavish trips, and the fact that Las Vegas has become synonymous with a “good time” for adults has led to what Adelson feels is an unfair attack on Vegas. He says, “If you are going to vilify Las Vegas because it’s a great place to go, let’s vilify all 30 states that legalized gaming…What’s the implication here? That the government on taxpayer money will only allow people to go to places where they will not enjoy themselves, where they are going to hate it” (“Vegas Mogul”). The backlash against corporate expenses, and newly image-conscious corporations refusing to spend money to travel to a place nicknamed Sin City, has “worsened the travel slump,” and has led to the reduction of jobs as a result.
Nevada’s auto traffic numbers can also tell us how tourism has decreased in the state. December’s average daily auto traffic fell 2.5 percent to 80,736 vehicles a day on all major highways and 1.3 percent to 38,586 vehicles on Interstate 15 at the Nevada-California border (Velotta).. For the year, traffic was down 5.3 percent on I-15 and other major highways
Las Vegas also has the “highest foreclosure rate of any major metro area” (Stein). Also, the unemployment rate jumped from 3.8% to 12.3% in only three years’ time. Those who have been able to keep their jobs are still suffering, because their wage depends on generous tips from the clientele.
The only key indicator of tourism that increased in 2008 was room inventory—room inventory is up 5.7 percent to 140,529 rooms (Velotta). However, this is not necessary a beneficial thing for tourism—with more rooms, local officials will have to bring in even more tourists and visitors to Las Vegas in order to strengthen the occupancy and ADR rates. The increase in room inventory was due to the openings of the Palazzo, Wynn Encore, Aliante Station, Eastside Cannery, and the opening of a new tower in South Point on Las Vegas Boulevard South. In addition, there are frozen construction projects everywhere because casino owners borrowed way too much money to build hotels that were way too big (Stein).
Nevada is nearly bankrupt because it relies mostly on taxing casino owners, with no collection of income taxes (Stein). Due to the decrease in revenues in Las Vegas, the state of Nevada has been devastated. The only hospital cancer wing for uninsured patients had to be closed down due to budget cuts, the Las Vegas Art Museum was lost, and there are empty, closed-down storefronts everywhere, including the Neonopolis, a $100 million, 250,000 sq.ft. mall. The stat
