Las Vegas Sun

July 25, 2008

ODDS ‘N’ ENDS:

One man’s theories on Vegas’ economy, then and now

By Jeff Haney

Mon, May 12, 2008 (2 a.m.)

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Beyond the Sun

News item: The Nevada casino industry reports a significant decline in gambling revenue for a third consecutive month, blaming weakness in the national economy. Gambling revenue on the Strip falls 4.8 percent in March, according to the latest figures from the state Gaming Control Board. This follows declines of 3.1 percent in February and 1.3 percent in January. The decline in gambling revenue in March amounts to 1.5 percent statewide and 2 percent in Clark County.

Short version: Las Vegas is no longer recession-proof.

It wasn’t always that way, as legendary former Las Vegas bookmaker Scott Schettler remembers it.

During his career in the Nevada gaming industry, recessions came and went, but there was one constant: People always had money to bring to Las Vegas and gamble.

“Even in the 1970s, during the Carter administration when inflation was running in the double digits, in Las Vegas you would never know it,” said Schettler, best known for running the Stardust sports book in the 1980s. “There were never gas lines here, or anything like that.

“The bad economy would always be on the news, and we’d be standing here looking at each other like, ‘What are they talking about?’ Las Vegas always chugged right along, through all those recessions — until now.”

Schettler has a theory on why the current economic turbulence has affected Las Vegas in a way previous recessions did not. Las Vegas, contrary to popular belief, is no longer a gambling town.

It’s now essentially a Triple-A, Pacific Coast League city in the Southwest with great restaurants, upscale spas and fancy stores ... which also happens to offer gambling.

And although people still do like to bet the pass line or split 8s, even in a recession, they don’t have the money to indulge in the seaweed mud-wrap treatment or chow down on foie gras with a ginger-fig-balsamic reduction.

“The attractions of the city have become diversified outside of gambling,” Schettler said. “It used to be, even if you were on your deathbed, you’d still have money to gamble with. That might still be the case, but in Las Vegas gambling is no longer the main attraction. It’s the shows, the food, the shopping.

“The people that came here used to come to gamble. They didn’t come to eat. They didn’t have time to eat — they were too busy gambling. Sure, they would bring their wives and give them money to shop, blah, blah, blah, but the gambling was the thing.

“Now, they say, OK, we’ll budget $300 for the shows, $1,000 to shop and $150 for the slot machines.”

It’s a thought process that’s practically foreign to Schettler, who came to Las Vegas 40 years ago with big plans involving betting and booking sports.

“When guys like me came to town, you came because it was a gambling town,” Schettler, 66, said. “You came because you were in the business, or because you had a system to beat the blackjack tables, or you wanted to bet sports, or you came to deal. It was all gambling-related.

“The dealer jobs were good, and you had to be a good dealer. You couldn’t just stand there and throw cards around. To work in a sports book, to work as a bookmaker, you better know your stuff cold or you would get your pockets picked clean.”

Having relegated gambling to a diminished role in an ensemble cast of enticements, Las Vegas is suffering now that the economy has officially entered the tank. Schettler never thought he would see it happen, although he figures Las Vegas will manage to survive.

You might describe his mind-set as cautiously pessimistic.

“It could get ugly,” said Schettler, who now runs the gambling Web site Wiseguys.com. “The percentage of money tourists spend on gambling keeps dropping, and now you see these construction projects being put on hold.

“Las Vegas won’t collapse, but the weak spots will be cleared away. The flotsam will be gone and they’ll do what it takes to make money again. They’ll reinvent themselves again.”

Discussion: 3 comments so far…

  1. By vegasmisty
    5/12/08 at 10:42 p.m.
    Suggest removal

    Vegas has concentrated itself on the big rollers. Just look at the condos being built. The average Joe that lives here cant afford those. Everything going up lately is for the ones with BIG BUCKS. There was a time when they would cater to the small time gambler and made them feel like a big roller.
    Now everything is big ticket items. Most occasional tourists and even most locals cant afford the show ticket prices.

    Being a local we have seen over the past 8 mos or so changes being made to the local casinos where less is being offered for the constant players. Comps use to flood the mail boxes with $50.00 or more free money and FREE dinners or $25.00-30.00 off a dinner.

    Now the flood is a trickle and its $10.00 free money and $5-10 off dinners. Plus the slot machines are so tight now they squeek as they turn. Playtime is almost non-existent. Some casinos have taken out slot machines thereby cutting the amount they need to hold in reserve based on the number of machines they have so choices are limited now. So your getting less and putting out more and faster than usual. Not a good recipe for the casinos here at all.

    The changes are rather obvious to the faithful patron. But these casinos are only cutting their own throat by doing this as their once faithful patron will try and find a casino that will give them more bang for their buck instead of pumping good money after bad.

    Some casinos will smarten up when their bottom line really starts to fall because the locals are the ones helping keep their doors open, not the once a year tourist and more tourists wont go to a smaller local casino off the beaten track.

    When locals hurt because of higher prices on gas, food and mainstay items, gambling is the first thing they cut esp. when its certain that the casinos are just grabbing the few hundred the local drops in a few hours and gives nothing in return.

  2. By coventry
    5/13/08 at 7:04 a.m.
    Suggest removal

    No doubt about it, the casinos have clearly developed a real preference for the "well heeled" high rollers. Strip casinos have totally ridiculous table limits. Who do they think is going to keep dropping $15 for each hand of blackjack? And the room rates are freaking nuts! $300/night! Who's got the money for that? As an informed local, I still know the casinos that offer real value. Hint: it's not on the strip. The station casinos are probably the best for local deals on food. For any decent gambling action I need to go and sit in a smoke-filled dump on Fremont Street. But change is coming I think. $4 gas may just bring back the real Vegas deals.

  3. By FleaStiff
    5/16/08 at 8:32 p.m.
    Suggest removal

    The upscale customer seeking a "Vegas Experience" rather than seeking gambling may be profitable for the casinos but its a short-term view for the casino to take.

    After the Show, Spa, Restaurant, Nightclub and only as an afterthought a trip to the tables, the upscale customers will indeed remember that Shows, Spas, Restaurants and Nightclubs exist elsewhere.

    With all the tip-hustling in the nightclubs, do the casinos really think the players are then going to go to the casino's tables and forget that they have already been hustled? Even those who do play in the casino will be tipping far less.

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