Often times, the "casino-ification" of the economy (beyond the specifics of Las Vegas) seems to suffer from the short-term-profits-over-long-term-value proposition. Sports leagues seems a great example of this. They work hard these days to extract maximum value from existing fans while often ignoring how these fans became so devoted in the first place. European Soccer's Super League idea fits into this box to me, as does a lot of recent choices the NBA has made. The whole-hog embrace of sports gambling by leagues across the spectrum surely also fits in here.
Agreed on the NBA, with the meaningless play in games (for a league where over half the teams make the playoffs!) and the use of coaches’ challenges jam even more commercial breaks in
This is pretty compelling. I’m the type of visitor that Nate is focusing on - not wealthy, has fun gambling once in a blue moon but is budget conscious about it.
I haven’t been to Vegas since the kids were born - so over a decade now - but it isn’t impossible to imagine regular trips every year or two, like my buddies and I used to do.
But: just telling me that Blackjack now pays 6:5 instead of 3:2 is enough to keep me away. That’s the most fun part of the game! And when you add in everything else becoming actually expensive? Really forget it, as in “not even a non-gambling trip to see shows and relax” forget it. Being able to gorge yourself on food and booze without having to scrimp was a big part of what made it worth such a long trip in the first place. And EVERYONE HATES HIDDEN FEES. Hotels have to learn this.
It's so bad. The hotels have nickle and dimed me during my stays there while I was working security for their own events.
It's ridiculous, and I've noted more than once to my coworkers that I refuse to attend industry events like Blackhat or Def Con in the state because of how annoying I find Vegas as a whole since the 2010s. I'd avoid the city all together if wasn't for work
I intuitively feel that this is the same phenomenon as Walt Disney World no longer catering to the middle class, and suspect that WDW is going to have a similar hit. It’s not about gambling, but about how relentless optimization at the same time that there are just more rich people by volume means that the incentives trend upwards—sometimes to the point of killing the golden goose.
This is exactly the same as stories I've read about going to Walt Disney World. Based on what I've read, it used to be aimed at middle-class families. Now they may be priced out -- and I'd add to that the complexity of offerings, the expectations for a longer stay, and the heavy weighting toward paying extra for a Disney hotel to get the full value (can get to the rides earlier, etc.). Disney used to be a shared common experience among many American families, and big "Disney fans" could go many times. Now it's deliberately aimed at upper-income consumers and is not really affordable anymore for most others, since the upper-income consumers may be fewer in number but can be made to pay much more.
Mind you, if you were historically minded you might identify the risk in this strategy as 'Whales eventually get bored'.
In the late 1920's and throughout the 1930's, as the lower class spending retracted, you had more focus in business targeting the ultra wealthy for spending. This as first seemed like a good idea, but pleasing the rich is expensive proposition from the start, and competition means you are risking more in hopes that you are chosen for one of the limited slots of interest.
But, should tastes turn or wallets lighten before you can adjust, you end up sitting on the inventory unable to sell or with obligations you cannot afford, and the drop needed for interest by the lower class has continued to expand as there is no longer the connection to the 'common man' to bring in the less profitable but more stable business.
The irony was many of the "poor man's options" like Diners and Ford survived the depression and bloomed into the post war standards while their exclusive counterparts like Pierce-Arrow and the all but a handful of the 'Clubs' of the 20's/30's disappeared
Agreed! For years I had a reasonably priced annual WDW pass with blackout dates. Now, the cheapest passes are increasingly useless and cost way more. Disney lost me long ago and I wouldn't go back unless they paid me.
It might but people are still going. There's been less people since 2019 but attendance is still far higher than when I was a kid, and it's more spread out so there is no traditional off-season anymore.
I was in the comments section to say basically the same thing. This isn't a unique pattern... it's happening or has happened in pretty much every industry over the last decade or two. This is what people are talking about when they talk about "late-stage capitalism." Loss leaders and stuff like that aren't allowed anymore as corporations don't give a shit about their customers anymore and everything has to be hyper-optimized.
No mention of the fact that many cities, particularly in the East Coast have built/are building casinos of decent quality, which leads to someone like myself who lives in DC asking : Why deal with flying (and all of the negatives that come with air travel today) to Vegas, and instead just drive the 20-30 minutes to the MGM nearby?
Well said, and that's fairly new --- we have one within easy driving distance of my house (never went), and apparently casinos are opening in New York and Baltimore soon. So indeed, with flying as awful as it has become, why go to Vegas?
I mean, I don't *consider* the Horseshoe casino worth my time,
but Baltimore has HAD Casino's for years now.
Maryland is lousy with Casino's these days, and if you ever want to meet your local Congressman I would suggest visiting the Live Casino on the weekends.
He's SUPPOSED to be in Washington. . . he SAYS he's in Washington, working hard for The People. He says this in now-weekly "newsletters," so my guess is he's worried about the Midterms. He's the only ahem, vulnerable congressman, I suppose you can guess what that means in Maryland.
Thanx for the intel, M. Reed --- a little disconcerting to hear there are so many casinos in Maryland. Plainly I don't get out much!
Last time I was in Vegas (years ago), I met lots of foreigners, so the foreigner thesis seems attractive. But the internet says they are just 12% of visitors, so even a 20% decline isn't enough to explain more than a quarter of the Vegas decline.
The other type of person I met in Vegas was kinda working class middle americans. I think their spending is declining for other reasons (their overall consumer spending is dipping after all. makes sense that they might cut vacations to vegas first).
Third thesis would be the broad legalization of sports betting, prediction markets, and widespread crypto based-gambling. I think this one is probably second order.
It's getting more and more iffy to get even visitors' visas to come into the U.S. I would suppose that has something to do with this. But I agree that Vegas may well be getting out-competed by other ways to gamble away people's money.
He specifically mentions Canada and how it can only contribute to a small portion of the decline.
But more than that, his discussion of baccarat revenues being up and the common association with high rollers from Asia counters a hypothesis that international tourism is a cause of revenue decline at all. Volume of people? Sure. Revenue? Those data points say it’s not highly relevant.
This is definitely a part of it, and I’m surprised it didn’t get more attention in the piece. But as A_Hamilton points out there probably is a decline is working class Vegas folks. The overall experience is incredibly expensive and all really boring last time I went pre-pandemic. It’s cheaper just to fly internationally and have a good time elsewhere. Vegas is expensive and doesn’t really offer that much outside of nature (good hiking and rock climbing) and gambling if that’s your thing.
Not only online, but, also many states have casinos with sports books. I live outside Detroit & there are 3 in Detroit. It used to be you had to go to Vegas for that action & there was a certain fun value to going to a Vegas sports book for a big game, March Madness, etc.
Now, I can drive 40 minutes for that, instead of having to fly 4 hrs, get a hotel, etc.
There is short term greedy and long term greedy; the latter is way better. Maybe they think it is like boiling the frog slowly; it won't notice but it seems they are noticing. An ALGO optimized world is short time greedy but it doesn't feel good and makes you look for alternatives.
Given that gambling as a whole is growing consistently YoY in the US I would guess that Vegas’s decline is more about mobile sports betting crowding out in person gambling than anything else.
I think the short term profit vs long term consumer value tension is interesting. I can imagine that we’re at a low point where we’ve gotten very good at maximizing short term profits but only started to get detailed long time horizon data on people’s psychology.
I’ve enjoyed Vegas for years, and didn’t mind the “entertainment cost” of gambling losses, in exchange for somewhat reasonably priced rooms, good food choices, and the overall vibe. But not anymore, because the room and dining prices have become ridiculously exorbitant and I feel nickel-and-dimed for literally everything. I go elsewhere now, including Nashville, for much better value.
This strikes me as asking the wrong question. The impressive thing about the "More vacancy in Vegas" is not the small extrapolated dip in 2025 but the relentless upward progress since 1970. Even the over 19 million visitors in 2020--more than in the virus-free 1989--is more success than failure.
Why has Las Vegas been immune from the boom-and-bust bankruptcies of Atlantic City, Native American casinos, and pretty much every other gambling venue in the US? Even Reno has been more volatile. Macao has had uninterrupted success, but only since 2002. Monte Carlo has its ups-and-downs, but not as extreme as Atlantic City.
Of course, there have been spectacular Las Vegas bankruptcies, and dull ones, of individual casinos--but always because some newer, better casino was taking their customers.
I don't deny the micro-reasons cited in this post--and I think on-line gambling is the biggest one, despite Las Vegas capturing a piece of the action--but I have faith in the Las Vegas brand to turn the slowdown into a launchpad for the next leap forward.
I'm also a big fan of Las Vegas off the strip. To me the heart of the city was the Gamblers' Bookstore, the Blackjack Ball and the private poker games at the Las Vegas Country Club--along with wonderful cheap Mexican and Asian restaurants, alt-Norte music scene and a cheerful street vibe. This has eroded and I miss it more than anything on the strip.
This is a very good point. Even accepting everything in this article about Vegas’s greed: why has it wildly succeeded when Atlantic City has wildly failed? (If you think AC hasn’t wildly failed you haven’t been there)
Thank you. And Atlantic City is the norm, not the exception. Successful casinos locations always seem to boom and bust, and the unsuccessful ones never boom. Atlantic City was an easy drive from large, rich Northeastern cities, with access by train as well; and a busy international airport in Philadelphia. It's got a beach. Las Vegas is a long haul from anywhere and has no physical attraction other than the austere beauty of the desert which you can see anywhere for free in million square miles of the American southwest and Mexico.
You make great points about Vegas's longevity of success. But the perception of Vegas was "mythical extravagance, yet somehow affordable (or at least Worth It)." The perception is changing, and anyone looking for value will start going elsewhere.
Thank you for the kind words. I don't disagree with you in the short-term, but history suggests to me that there is a long-term foundational reason for Las Vegas growth. The New York Yankees go through periods of a decade or more without great success, but always seem to come back with a dynasty to rack up a few World Series.
This was a long article which could have been summarized by saying that economists forecast an 8% drop in foreign tourists to the U.S. in 2025 compared to the prior year. Done.
Quite a lot of what I was reading about Vegas last year and earlier this year revolved around the theme that Vegas was busily gouging tourists with $12 cups of coffee and myriad other inflated costs for enjoying the wonder that is Vegas, with the unsurprising result that people were choosing other places to spend their cash.
Admittedly, I'm not a Vegas person. I have many happy childhood memories of twice yearly family trips to Vegas, when the rooms and meals were cheap, there were no theme hotels, and the folks would enjoy playing the slots and the occasional show, while we kids were high diving into the pool.
Since those halcyon days I've rarely visited this mecca of exuberant bad taste, truly ugly flash, and exalted mediocrity. Before Covid I made a yearly pilgrimage to attend the West Coast Pipe Show, held at the Palace Station casino, an off the strip establishment popular with the locals for its Sunday Brunch. And I attended an interior design trade show with a girlfriend who was in that business. I made my first visit since 2019 just last October, to attend the Las Vegas Pipe Show at the Palace Station.
The show was great and my interest in visiting the nearby Strip was nonexistent. If the show was held somewhere else, I wouldn't miss Vegas.
Otherwise I wouldn't have any reason to set foot there. I don't gamble. Getting around the strip at ground level has become an annoying obstacle course of avoiding aggressive grifters of one stripe or another. And it's just ugly.
The world is changing and Vegas is not responding, except to head for irrelevance. To the extent that Vegas had any virtues, none of it is eternal and it is becoming hopelessly dated.
The Strip strikes me as an exemplar of human failure. It's continued construction feels like a massive attempt to slather on more and more makeup to hide the faded relevance of an antiquated, wrinkled and cracked harridan.
I was expecting Nate to offer a different explanation for why Baccarat, the game of the wealthiest, was the only one of the Big Four doing well. Right now the consumers in every category of the U.S. economy are spending less, except the wealthy. It’s the most affluent who keeping our K-shaped economy afloat. Why should Vegas be any different?
1) There are more and more ways to gamble at home. Casinos are located close to many people, with no need to spend a gazillion dollars staying at Vegas resort.
2) Sports betting is ubiquitous online now. No need to go to Vegas.
3) Travelers have tons of options. If you're going to spend the kind of money you now have to spend to really enjoy Vegas, you can go to Europe...Hawaii...other places.
Often times, the "casino-ification" of the economy (beyond the specifics of Las Vegas) seems to suffer from the short-term-profits-over-long-term-value proposition. Sports leagues seems a great example of this. They work hard these days to extract maximum value from existing fans while often ignoring how these fans became so devoted in the first place. European Soccer's Super League idea fits into this box to me, as does a lot of recent choices the NBA has made. The whole-hog embrace of sports gambling by leagues across the spectrum surely also fits in here.
Agreed on the NBA, with the meaningless play in games (for a league where over half the teams make the playoffs!) and the use of coaches’ challenges jam even more commercial breaks in
This is pretty compelling. I’m the type of visitor that Nate is focusing on - not wealthy, has fun gambling once in a blue moon but is budget conscious about it.
I haven’t been to Vegas since the kids were born - so over a decade now - but it isn’t impossible to imagine regular trips every year or two, like my buddies and I used to do.
But: just telling me that Blackjack now pays 6:5 instead of 3:2 is enough to keep me away. That’s the most fun part of the game! And when you add in everything else becoming actually expensive? Really forget it, as in “not even a non-gambling trip to see shows and relax” forget it. Being able to gorge yourself on food and booze without having to scrimp was a big part of what made it worth such a long trip in the first place. And EVERYONE HATES HIDDEN FEES. Hotels have to learn this.
It's so bad. The hotels have nickle and dimed me during my stays there while I was working security for their own events.
It's ridiculous, and I've noted more than once to my coworkers that I refuse to attend industry events like Blackhat or Def Con in the state because of how annoying I find Vegas as a whole since the 2010s. I'd avoid the city all together if wasn't for work
I intuitively feel that this is the same phenomenon as Walt Disney World no longer catering to the middle class, and suspect that WDW is going to have a similar hit. It’s not about gambling, but about how relentless optimization at the same time that there are just more rich people by volume means that the incentives trend upwards—sometimes to the point of killing the golden goose.
This is exactly the same as stories I've read about going to Walt Disney World. Based on what I've read, it used to be aimed at middle-class families. Now they may be priced out -- and I'd add to that the complexity of offerings, the expectations for a longer stay, and the heavy weighting toward paying extra for a Disney hotel to get the full value (can get to the rides earlier, etc.). Disney used to be a shared common experience among many American families, and big "Disney fans" could go many times. Now it's deliberately aimed at upper-income consumers and is not really affordable anymore for most others, since the upper-income consumers may be fewer in number but can be made to pay much more.
Correct.
Mind you, if you were historically minded you might identify the risk in this strategy as 'Whales eventually get bored'.
In the late 1920's and throughout the 1930's, as the lower class spending retracted, you had more focus in business targeting the ultra wealthy for spending. This as first seemed like a good idea, but pleasing the rich is expensive proposition from the start, and competition means you are risking more in hopes that you are chosen for one of the limited slots of interest.
But, should tastes turn or wallets lighten before you can adjust, you end up sitting on the inventory unable to sell or with obligations you cannot afford, and the drop needed for interest by the lower class has continued to expand as there is no longer the connection to the 'common man' to bring in the less profitable but more stable business.
The irony was many of the "poor man's options" like Diners and Ford survived the depression and bloomed into the post war standards while their exclusive counterparts like Pierce-Arrow and the all but a handful of the 'Clubs' of the 20's/30's disappeared
Agreed! For years I had a reasonably priced annual WDW pass with blackout dates. Now, the cheapest passes are increasingly useless and cost way more. Disney lost me long ago and I wouldn't go back unless they paid me.
It might but people are still going. There's been less people since 2019 but attendance is still far higher than when I was a kid, and it's more spread out so there is no traditional off-season anymore.
Good to know, I’ll work that into my mental model somewhere.
Vegas wouldn’t be the first time an industry got greedy and enshittified their product as a result.
I was in the comments section to say basically the same thing. This isn't a unique pattern... it's happening or has happened in pretty much every industry over the last decade or two. This is what people are talking about when they talk about "late-stage capitalism." Loss leaders and stuff like that aren't allowed anymore as corporations don't give a shit about their customers anymore and everything has to be hyper-optimized.
It hasn't happened in food processors or grocery stores, Senile Joe's lying in the spring of '24 notwithstanding.
No mention of the fact that many cities, particularly in the East Coast have built/are building casinos of decent quality, which leads to someone like myself who lives in DC asking : Why deal with flying (and all of the negatives that come with air travel today) to Vegas, and instead just drive the 20-30 minutes to the MGM nearby?
Well said, and that's fairly new --- we have one within easy driving distance of my house (never went), and apparently casinos are opening in New York and Baltimore soon. So indeed, with flying as awful as it has become, why go to Vegas?
I mean, I don't *consider* the Horseshoe casino worth my time,
but Baltimore has HAD Casino's for years now.
Maryland is lousy with Casino's these days, and if you ever want to meet your local Congressman I would suggest visiting the Live Casino on the weekends.
He's SUPPOSED to be in Washington. . . he SAYS he's in Washington, working hard for The People. He says this in now-weekly "newsletters," so my guess is he's worried about the Midterms. He's the only ahem, vulnerable congressman, I suppose you can guess what that means in Maryland.
Thanx for the intel, M. Reed --- a little disconcerting to hear there are so many casinos in Maryland. Plainly I don't get out much!
One thing I was wondering reading this:
1) Hasn't international tourism been down?
2) I imagine it's down more for lesiure than for business travel.
3) part of 1/2, but Canada specifically was alienated (still is?)
Last time I was in Vegas (years ago), I met lots of foreigners, so the foreigner thesis seems attractive. But the internet says they are just 12% of visitors, so even a 20% decline isn't enough to explain more than a quarter of the Vegas decline.
The other type of person I met in Vegas was kinda working class middle americans. I think their spending is declining for other reasons (their overall consumer spending is dipping after all. makes sense that they might cut vacations to vegas first).
Third thesis would be the broad legalization of sports betting, prediction markets, and widespread crypto based-gambling. I think this one is probably second order.
It's getting more and more iffy to get even visitors' visas to come into the U.S. I would suppose that has something to do with this. But I agree that Vegas may well be getting out-competed by other ways to gamble away people's money.
He specifically mentions Canada and how it can only contribute to a small portion of the decline.
But more than that, his discussion of baccarat revenues being up and the common association with high rollers from Asia counters a hypothesis that international tourism is a cause of revenue decline at all. Volume of people? Sure. Revenue? Those data points say it’s not highly relevant.
This is definitely a part of it, and I’m surprised it didn’t get more attention in the piece. But as A_Hamilton points out there probably is a decline is working class Vegas folks. The overall experience is incredibly expensive and all really boring last time I went pre-pandemic. It’s cheaper just to fly internationally and have a good time elsewhere. Vegas is expensive and doesn’t really offer that much outside of nature (good hiking and rock climbing) and gambling if that’s your thing.
What is the impact of online sports gambling? Wouldn’t that be expected to reduce visits to Vegas?
Not only online, but, also many states have casinos with sports books. I live outside Detroit & there are 3 in Detroit. It used to be you had to go to Vegas for that action & there was a certain fun value to going to a Vegas sports book for a big game, March Madness, etc.
Now, I can drive 40 minutes for that, instead of having to fly 4 hrs, get a hotel, etc.
There is short term greedy and long term greedy; the latter is way better. Maybe they think it is like boiling the frog slowly; it won't notice but it seems they are noticing. An ALGO optimized world is short time greedy but it doesn't feel good and makes you look for alternatives.
Given that gambling as a whole is growing consistently YoY in the US I would guess that Vegas’s decline is more about mobile sports betting crowding out in person gambling than anything else.
I think the short term profit vs long term consumer value tension is interesting. I can imagine that we’re at a low point where we’ve gotten very good at maximizing short term profits but only started to get detailed long time horizon data on people’s psychology.
I’ve enjoyed Vegas for years, and didn’t mind the “entertainment cost” of gambling losses, in exchange for somewhat reasonably priced rooms, good food choices, and the overall vibe. But not anymore, because the room and dining prices have become ridiculously exorbitant and I feel nickel-and-dimed for literally everything. I go elsewhere now, including Nashville, for much better value.
This strikes me as asking the wrong question. The impressive thing about the "More vacancy in Vegas" is not the small extrapolated dip in 2025 but the relentless upward progress since 1970. Even the over 19 million visitors in 2020--more than in the virus-free 1989--is more success than failure.
Why has Las Vegas been immune from the boom-and-bust bankruptcies of Atlantic City, Native American casinos, and pretty much every other gambling venue in the US? Even Reno has been more volatile. Macao has had uninterrupted success, but only since 2002. Monte Carlo has its ups-and-downs, but not as extreme as Atlantic City.
Of course, there have been spectacular Las Vegas bankruptcies, and dull ones, of individual casinos--but always because some newer, better casino was taking their customers.
I don't deny the micro-reasons cited in this post--and I think on-line gambling is the biggest one, despite Las Vegas capturing a piece of the action--but I have faith in the Las Vegas brand to turn the slowdown into a launchpad for the next leap forward.
I'm also a big fan of Las Vegas off the strip. To me the heart of the city was the Gamblers' Bookstore, the Blackjack Ball and the private poker games at the Las Vegas Country Club--along with wonderful cheap Mexican and Asian restaurants, alt-Norte music scene and a cheerful street vibe. This has eroded and I miss it more than anything on the strip.
This is a very good point. Even accepting everything in this article about Vegas’s greed: why has it wildly succeeded when Atlantic City has wildly failed? (If you think AC hasn’t wildly failed you haven’t been there)
Thank you. And Atlantic City is the norm, not the exception. Successful casinos locations always seem to boom and bust, and the unsuccessful ones never boom. Atlantic City was an easy drive from large, rich Northeastern cities, with access by train as well; and a busy international airport in Philadelphia. It's got a beach. Las Vegas is a long haul from anywhere and has no physical attraction other than the austere beauty of the desert which you can see anywhere for free in million square miles of the American southwest and Mexico.
You make great points about Vegas's longevity of success. But the perception of Vegas was "mythical extravagance, yet somehow affordable (or at least Worth It)." The perception is changing, and anyone looking for value will start going elsewhere.
Thank you for the kind words. I don't disagree with you in the short-term, but history suggests to me that there is a long-term foundational reason for Las Vegas growth. The New York Yankees go through periods of a decade or more without great success, but always seem to come back with a dynasty to rack up a few World Series.
This was a long article which could have been summarized by saying that economists forecast an 8% drop in foreign tourists to the U.S. in 2025 compared to the prior year. Done.
Quite a lot of what I was reading about Vegas last year and earlier this year revolved around the theme that Vegas was busily gouging tourists with $12 cups of coffee and myriad other inflated costs for enjoying the wonder that is Vegas, with the unsurprising result that people were choosing other places to spend their cash.
Admittedly, I'm not a Vegas person. I have many happy childhood memories of twice yearly family trips to Vegas, when the rooms and meals were cheap, there were no theme hotels, and the folks would enjoy playing the slots and the occasional show, while we kids were high diving into the pool.
Since those halcyon days I've rarely visited this mecca of exuberant bad taste, truly ugly flash, and exalted mediocrity. Before Covid I made a yearly pilgrimage to attend the West Coast Pipe Show, held at the Palace Station casino, an off the strip establishment popular with the locals for its Sunday Brunch. And I attended an interior design trade show with a girlfriend who was in that business. I made my first visit since 2019 just last October, to attend the Las Vegas Pipe Show at the Palace Station.
The show was great and my interest in visiting the nearby Strip was nonexistent. If the show was held somewhere else, I wouldn't miss Vegas.
Otherwise I wouldn't have any reason to set foot there. I don't gamble. Getting around the strip at ground level has become an annoying obstacle course of avoiding aggressive grifters of one stripe or another. And it's just ugly.
The world is changing and Vegas is not responding, except to head for irrelevance. To the extent that Vegas had any virtues, none of it is eternal and it is becoming hopelessly dated.
The Strip strikes me as an exemplar of human failure. It's continued construction feels like a massive attempt to slather on more and more makeup to hide the faded relevance of an antiquated, wrinkled and cracked harridan.
I was expecting Nate to offer a different explanation for why Baccarat, the game of the wealthiest, was the only one of the Big Four doing well. Right now the consumers in every category of the U.S. economy are spending less, except the wealthy. It’s the most affluent who keeping our K-shaped economy afloat. Why should Vegas be any different?
Think Nate is overthinking this.
1) There are more and more ways to gamble at home. Casinos are located close to many people, with no need to spend a gazillion dollars staying at Vegas resort.
2) Sports betting is ubiquitous online now. No need to go to Vegas.
3) Travelers have tons of options. If you're going to spend the kind of money you now have to spend to really enjoy Vegas, you can go to Europe...Hawaii...other places.
The Netflixication of gambling.
It's hard to qualify the affect of each factor, but they all add up:
Alcohol consumption is way down
Middle class is declining
Vegas is expensive now
Gambling is readily available locally
The fucking odds suck