Gambling Operators Say Economy's Long Struggles Have Slowed Postattack Rebound

Almost two years after the Sept. 11, 2001, terrorist attacks jolted Las Vegas' tourist based-economy, the city's casinos have yet to fully recover, industry insiders said.

Strip casinos only in the past few months began generating gambling revenue numbers equal to or better than pre-9-11 results, sacrificing a couple of years of growth if preattack trends had continued.

A sluggish national economy, the dot-com bubble-burst and the related stock market slide multiplied the effect of the terrorism-related travel decline, sucking the growth out of the Las Vegas casino market.

"I still don't believe the Las Vegas economy has fully recovered from 9-11, but I'm confident that Las Vegas will get back to running on all eight cylinders," Station Casinos Chief Financial Officer Glenn Christenson said. "Putting our (local) economy into context, very few other communities wouldn't trade places with Las Vegas."

Clark County's 193 gambling halls won $7.75 billion from gamblers between July 1, 2002, and June 30, up from the $7.47 billion won in fiscal 2002, which included more than nine months of the Sept. 11, 2001-related tourism slowdown.

Clark County casinos won $7.76 billion in fiscal 2001.

Las Vegas' tourism numbers generally mirror those for its casino profits.

Las Vegas Convention and Visitors Authority officials say the number of tourists visiting Las Vegas are bouncing back from their post-Sept. 11 numbers.

This past Labor Day weekend's visitor totals were up about 3.8 percent from last year, with about 275,000 daily visitors coming to Las Vegas this year. That is nearly level with the 274,000 daily visitors that came to Las Vegas for Labor Day just before the terrorist attacks in 2001.

Looking forward, bosses say future performance is closely tied to the economy and, to a lesser extent, the threat of terrorism.

Strip operators are more sensitive to national and international economic conditions than locals casinos, experts said, while the health of locals casinos is closely tied to the Las Vegas economy.

"We believe a rebound in the economy is the key," said Bill Paulos, one of three partners that owns the Cannery in North Las Vegas and operates the Rampart in Summerlin. "The average Joe is looking for a rainbow. We've been through two years of bad news, the terrorist attacks, war in Iraq, a recession. People want to believe recent signs of an economic turnaround."

Job creation, a rising stock market and Strip megaresort development are all factors that could fuel another late-'90s-style Las Vegas boom, experts said.

The local unemployment rate, lower than the national number but high by Las Vegas standards, is one key statistic that, if improved, would likely add new dollars to locals casino coffers, Christenson said.

"We need stronger consumer confidence, a stronger market and additional investment on the Las Vegas Strip," he said, naming a wish list echoed by a host of Las Vegas bosses.

University of Nevada, Las Vegas professor Bill Thompson said he expects the $2 billion Wynn Las Vegas, under construction and slated to open in April 2005, to spur additional megaresort development.

Steve Wynn's opening of The Mirage in 1989 and Bellagio in 1998 helped create past megaresort building booms, he said.

"We're poised for Steve Wynn to open a couple of thousand glamorous rooms and a beautiful property," Thompson said. "I think we'll get four or five big projects and at least 10,000 rooms in the next cycle that starts with Wynn."

Paulos and his partners think the economy is on the upswing.

"We think things are on the move. Is the (rebound) real or is it fleeting? That's the big question. Early signs look good," Paulos said, cautioning that his optimism about national and local economic prospects isn't complete.

"Are things still dicey?" he asked, "of course they are. Everyone's still concerned about Iraq and about the possibility of terrorism."

Terrorism is the biggest of the unknown variables that cloud an improving horizon, Thompson said.

"It's the one word that could screw everything up," the professor said. "Nobody wants to say the word -- like telling a pitcher he's got a no-hitter -- but the fear of terrorism is in everyone's belly."