In an otherwise not-particularly-astonishing news story about the imminent declaration of bankruptcy by casino operator Tropicana, the Wall Street Journal quoted a Moody's executive saying "Gaming operators overall are facing head winds from the broader economy. And unlike some past recessions, casinos are not proving to be recession proof this time around."
Gambling? No longer recession-proof? What is wrong with this country?!
But it appears to be true. The Associated Press reports that 12 out 19 states with casino or race track gambling saw gross revenue drop in January 2008 compared to a year ago -- with Nevada's revenue falling 5 percent.
So what happened to the idea that gamblers would keep betting on the ponies even as the economy crashed around them? The general theory seems to be that gambling's penetration of mainstream society has left it more vulnerable to mainstream trends. When gambling was limited to few a locations and fewer sports -- Nevada, horse-racing -- gamblers were hard-core, and unlikely to give in easily to ill economic winds. But now, opportunities for gambling are everywhere. Gambling's just another recreational activity, and as such, is the kind of discretionary expense that gets pared back when times are tight.
Amusingly, a New York Times story from 1992 on how the 1991 recession affected the gambling industry reads almost identically to the much more recent Associated Press story, to the point of quoting the very same academic expert, William Eadington, a professor of economics and director for the University of Nevada, Reno Institute for the Study of Gambling and Commercial Gaming. And just like the Associated Press story, which warned that even "with the housing market tanking and gasoline and food prices rising... gaming companies are going ahead with resorts that will add thousands of new rooms in Las Vegas," the 16-year-old New York Times article closes with a prediction that the 10,000 new hotel rooms shortly to come online in massive new Las Vegas casinos in Las Vegas will result "in more competition than ever for the gambling dollar."
The moral of the story? Recessions come and go, gambling revenues rise and fall in parallel, but in the long run, Las Vegas just gets bigger and bigger.