It’s not about what’s happening in Vegas that makes things exciting right now. Rather, it’s what’s not happening in Vegas that makes things interesting. I came across the following from last week’s issue of Newsweek (see Recession Hits Las Vegas):

Las Vegas…was once thought to be impervious to the economic swings suffered by the rest of the country. Not anymore. According to the Las Vegas Convention and Visitors Authority (LVCVA), Las Vegas has seen gambling revenues fall only once since 1970: in the aftermath of the Sept. 11 terror attacks they dropped 1 percent in 2002 from 2001. So far this year they’ve fallen 4 percent, the number of conventions held has dropped 10.4 percent, and average daily room rates were off 3.8 percent in the first two months of 2008, according to the most recent data available.

Several major construction projects on the Strip are delayed due to financing problems, including a second tower for Donald Trump’s new condo-hotel. Also delayed is a plan to build a $6 billion version of New York City’s famed Plaza Hotel. And while construction continues on the half-built $3 billion Cosmopolitan Resort and Casino next to the Bellagio, the project may be in jeopardy after developer Bruce Eichner’s company defaulted on a $760 million loan from Deutsche Bank.

As if that weren’t enough, there’s also a gambling-related bankruptcy to report this week. Tropicana Entertainment, the operator of numerous casino properties, filed for Chapter 11 bankruptcy protection (see Tropicana Casinos Files for Bankruptcy). We can now safely add Tropicana Entertainment to the list of prominent bankruptcies so far this year (see More Failure for Fodder).

And it’s not limited to Vegas, or even gambling. Other portions of the sin sector are slumping as well. From last month’s Variety (see Hard Times Ahead as Porn Goes Soft, via Big Picture):

Economists are citing some dire portents of a recession these days, but they’ve missed one indicator I find especially disturbing: The porn business has suddenly gone flaccid.

The drop in porn rentals and sales is worrisome on several fronts: Till now, porn has been a recession-proof business. Further, with the country already in a dispirited mood, the fact that porn has gone limp may indicate a true plunge in consumer confidence.

DVD porn is down between 10% and 30%…

Bottom line: When the sin industry struggles, …look out below!

This entry was posted on Wednesday, May 14th, 2008 at 7:52 pm and is filed under Corporate Strategy. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.